AMENDED AND RESTATED CREDIT AGREEMENT


                                 by and between


                               VISTA EYECARE, INC.
                    (f/k/a National Vision Associates, Ltd.)


                                       and


                          FOOTHILL CAPITAL CORPORATION


                          Dated as of November 12, 1999










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                                TABLE OF CONTENTS

                                                                         Page(s)

                             SCHEDULES AND EXHIBITS

Schedule C-1               Existing Collateral Access Agreements
Schedule E-1               Eligible Inventory Locations
Schedule S-1               Sub-Concentration Accounts
Schedule 3.1               Uniform Commercial Code Filings and Assignments
Schedule 5.5               Litigation
Schedule 5.10              Taxes
Schedule 5.11              Financial Condition
Schedule 5.12              Environmental Matters
Schedule 5.17              Subsidiaries
Schedule 5.18              Insurance
Schedule 5.25              Material Contracts
Schedule 6.14              Bank Accounts
Schedule 7.1               Permitted Liens
Schedule 7.5               Permitted Indebtedness
Schedule 7.8               Contingent Obligations
Schedule 7.14              Financial Covenants


Exhibit A                  Form of Compliance Certificate
Exhibit B                  Form of Credit Card Agreement
Exhibit C                  Form of Wal-Mart Lease
Exhibit D                  Form of Sam's Club Lease
Exhibit E                  Form of Fred Meyer, Inc. Lease





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<PAGE>












                      AMENDED AND RESTATED CREDIT AGREEMENT


         THIS AMENDED AND  RESTATED  CREDIT  AGREEMENT  (this  "Agreement"),  is
entered into as of November 12, 1999,  between FOOTHILL CAPITAL  CORPORATION,  a
California  corporation,  as lender and as agent for itself and each Person that
purchases any portion of Foothill Capital  Corporation's  rights and obligations
under this Agreement pursuant to Section 15.2 (collectively,  "Lender"),  with a
place of business located at Northpark Town Center, Building 400, 1000 Abernathy
Road, N.E., Suite 1450, Atlanta,  Georgia 30328, and VISTA EYECARE,  INC. (f/k/a
National Vision Associates, Ltd.), a Georgia corporation ("Borrower"),  with its
chief executive  office located at 296 Grayson Highway,  Lawrenceville,  Georgia
30045-5737.

                                    RECITALS

         WHEREAS,  Borrower,  Bank of America, N.A. (f/k/a Bank of America, FSB)
("Bank of America"),  and First Union National Bank ("First  Union") are parties
to that certain  Credit  Agreement  dated as of October 8, 1998, as modified and
amended by that certain  Waiver and  Amendment  dated as of December 4, 1998, as
further  modified and amended by that certain  Waiver and Amendment  dated as of
December 21, 1998,  as further  modified and amended by that certain  Waiver and
Amendment dated as of February 2, 1999, as further  modified and amended by that
certain Amendment dated as of March 31, 1999, as further modified and amended by
that  certain  Waiver and Consent  dated as of September  21,  1999,  as further
modified and amended by that certain  Forbearance  Agreement dated as of October
26, 1999, and as further  modified and amended by the  Assignment  Agreement (as
defined below) (as heretofore  further  modified and amended,  the "Prior Credit
Agreement"); and

         WHEREAS, Lender, Borrower, Bank of America and First Union entered into
that certain  Assignment and  Acceptance of even date herewith (the  "Assignment
Agreement")  pursuant to which Lender (a) purchased all of the Loans (as defined
in the Prior Credit Agreement) and assumed all of the Commitments (as defined in
the Prior Credit  Agreement)  of Bank of America and First  Union,  (b) replaced
Bank  of  America  as  Documentation  Agent  (as  defined  in the  Prior  Credit
Agreement),  and (c)  replaced  First  Union as Issuing  Bank (as defined in the
Prior Credit  Agreement) and the  Administrative  Agent (as defined in the Prior
Credit Agreement); and

         WHEREAS,  Borrower  and Lender,  in its  capacity as the  Documentation
Agent, the Issuing Bank, the Administrative  Agent and the sole Bank (as defined
in the Prior Credit Agreement) under the Prior Credit Agreement, desire to amend
and restate the Prior Credit Agreement in its entirety as set forth herein; and





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<PAGE>




         WHEREAS,  each of  Borrower  and Lender  acknowledges  and agrees  that
Lender shall, for all purposes under this Agreement and the other Loan Documents
(as  defined  herein),  act on its own  behalf  and as agent for itself and each
Person that purchases any portion of Foothill Capital  Corporation's  rights and
obligations  under  this  Agreement  pursuant  to  Section  15.2,  and as  such,
continued  reference  to the roles of the Bank,  the  Documentation  Agent,  the
Issuing Bank and the  Administrative  Agent is no longer necessary or desirable;
and

         WHEREAS,  Borrower  acknowledges and agrees that the security  interest
granted to Lender in its capacity as the Administrative  Agent, on behalf of the
Issuing  Bank,  the  Documentation  Agent and the Banks,  pursuant  to the Prior
Credit  Agreement  and the other Loan  Documents (as defined in the Prior Credit
Agreement),  shall remain outstanding and in full force and effect in accordance
with the Prior Credit Agreement and shall continue to secure the Obligations (as
defined herein); and

         WHEREAS,  each of Borrower and Lender  acknowledges and agrees that, in
view of the  consolidation  of the  roles of the Bank,  the  Issuing  Bank,  the
Documentation Agent and the Administrative  Agent, the security interest granted
to Lender in its  capacity  as the  Administrative  Agent shall  hereinafter  be
considered a security interest granted to Lender acting on its own behalf and as
agent for itself and each Person that purchases any portion of Foothill  Capital
Corporation's  rights and obligations  under this Agreement  pursuant to Section
15.2; and

         WHEREAS, each of Borrower and Lender acknowledges and confirms that (i)
the  Obligations  (as  defined  herein)  represent,   among  other  things,  the
amendment,  restatement,  renewal, extension,  consolidation and modification of
the Obligations (as defined in the Prior Credit Agreement) arising in connection
with the Prior  Credit  Agreement  and other Loan  Documents  (as defined in the
Prior Credit Agreement) executed in connection therewith;  (ii) the Prior Credit
Agreement  and  the  other  Loan  Documents  (as  defined  in the  Prior  Credit
Agreement)   executed  in  connection   therewith  and  the  collateral  pledged
thereunder  shall secure,  without  interruption  or impairment of any kind, all
existing Indebtedness (as defined in the Prior Credit Agreement) under the Prior
Credit  Agreement  and the other Loan  Documents (as defined in the Prior Credit
Agreement)  executed in  connection  therewith  as amended,  restated,  renewed,
extended,   consolidated  and  modified  hereunder,   together  with  all  other
obligations  hereunder;  (iii)  all  Liens  (as  defined  in  the  Prior  Credit
Agreement)  evidenced by the Prior Credit Agreement and the other Loan Documents
(as defined in the Prior Credit Agreement) executed in connection  therewith are
hereby  ratified,  confirmed  and  continued;  and (iv) the Loan  Documents  (as
defined herein) are intended to restate, renew, extend,  consolidate,  amend and
modify the Prior Credit  Agreement  and the other Loan  Documents (as defined in
the Prior Credit Agreement) executed in connection therewith; and





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<PAGE>

         WHEREAS, each of Borrower and Lender intends that (i) the provisions of
the Prior Credit Agreement and the other Loan Documents (as defined in the Prior
Credit  Agreement)  executed in connection  therewith,  to the extent  restated,
renewed,  extended,  consolidated,   amended  and  modified  hereby,  be  hereby
superseded and replaced by the provisions hereof and of the other Loan Documents
(as defined  herein);  and (ii) by entering into and performing their respective
obligations hereunder, this transaction shall not constitute a novation;

         NOW, THEREFORE,  in consideration of the mutual agreements,  provisions
and covenants  contained herein,  the parties hereby amend and restate the Prior
Credit Agreement in its entirety and hereby further agree as follows:

         1.       DEFINITIONS AND CONSTRUCTION.

                  1.1  Definitions.  As used in this  Agreement,  the  following
terms shall have the following definitions:

                           "Account Debtor" means any Person  who  is or who may
become obligated under, with respect to, or on account of, an Account.

                           "Accounts" means all currently existing and hereafter
arising accounts,  contract rights,  and all other forms of obligations owing to
Borrower or any Restricted  Subsidiary arising out of the sale or lease of goods
or the  rendition  of  services  by  Borrower  or  such  Restricted  Subsidiary,
irrespective of whether earned by performance, and any and all credit insurance,
guaranties, or security therefor.

                           "Acquisition"  means, with respect to any Person, any
transaction or series of related  transactions  for the purpose of or resulting,
directly or indirectly,  in (a) the acquisition of all or  substantially  all of
the assets of any other  Person,  or of any  business  or  division of any other
Person,  (b) the  acquisition  of more than fifty  percent  (50%) of the capital
stock,  partnership  interests,  membership  interests  or  equity  of any other
Person,  or otherwise  causing any other  Person to become a Subsidiary  of such
Person, or (c) a merger or consolidation or any other combination with any other
Person  (other  than a Person  that is an existing  Subsidiary  of such  Person)
provided  that  such  Person or a  Subsidiary  of such  Person is the  surviving
entity. The term "Acquisition"  shall not include the formation by Borrower of a
new Subsidiary provided that its Investment therein does not violate Section 7.4
hereof.

                           "Adjusted  Eurodollar  Rate"  means,  with respect to
each  Interest  Period  for any  Eurodollar  Rate  Advance,  the rate per  annum
(rounded  upwards,  if necessary,  to the next 1/16%) determined by dividing (a)
Eurodollar  Rate for such Interest  Period by (b) a percentage  equal to (i) one
hundred  percent  (100%)  minus  (ii)  the  Reserve  Percentage.   The  Adjusted
Eurodollar  Rate shall be adjusted on and as of the  effective day of any change
in the Reserve Percentage.

                           "Adjusted  Net  Worth"  means,   as  of  any  date of
determination,  the sum of (a) net worth of Borrower and i ts  Subsidiaries on a
consolidated basis determined in accordance with GAAP, plus (b) non-cash charges
reasonably acceptable to Lender taken after the Amendment Closing Date.


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<PAGE>

                           "Adjustment  Date"  has  the  meaning  set forth  in
Section 2.3(a).

                           "Administrative Agent" has the  meaning  set forth in
the Prior Credit Agreement.

                           "Advances"  has  the  meaning  set  forth  in Section
2.1(a).

                           "Affiliate"  means,  as applied  to  any Person,  any
other Person who directly or indirectly  controls,  is  controlled  by, is under
common control with or is a director or officer of such Person.  For purposes of
this definition,  "control" means the possession, directly or indirectly, of the
power to vote five percent (5%) or more of the securities having ordinary voting
power for the election of  directors  or the direct or indirect  power to direct
the management and policies of a Person.

                           "Agreement" has the meaning set forth in the preamble
hereto.

                           "Amendment Closing  Date" means the date of the first
to occur of the making of the  initial  Advance,  the  issuance  of the  initial
Letter of Credit or the funding of the Term Loans under this Agreement.

                           "Assignment  Agreement"  has the meaning set forth in
the recitals to this Agreement.

                           "Assignment  of  LLC  Interests"  means  that certain
Amended and Restated  Assignment of Limited  Liability Company Interests of even
date herewith  among New West  Eyeworks,  Inc., as pledger,  the  Administrative
Agent and Lender, in form and substance satisfactory to Lender.

                           "Assignment of Notes" means that certain  Amended and
Restated   Assignment  of  Notes  of  even  date  herewith  among Borrower,  the
Administrative  Agent and Lender,  and acknowledged by Mexican Vision Associate
Operadora S. de R.L. de C.V., in form and substance satisfactory to Lender.

                           "Authorized   Person"  means  any  officer  or  other
employee of Borrower.

                          "Availability" means, as of the date of determination,
the  result (so long as such  result is a positive  number) of (a) the lesser of
the  Borrowing  Base or the Maximum  Revolving  Amount,  less (b) the  Revolving
Facility Usage.


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<PAGE>

                           "Average Unused Portion of Maximum Revolving  Amount"
means, as of any date of determination,  (a) the lesser of the Borrowing Base or
the Maximum Revolving Amount,  less (b) the sum of (i) the average Daily Balance
of Advances that were outstanding  during the immediately  preceding month, plus
(ii) the  average  Daily  Balance of the  undrawn  Letters  of Credit  that were
outstanding during the immediately preceding month.

                           "Bank  of  America"  has the meaning set forth in the
recitals to this Agreement.

                           "Bankruptcy  Code" means the United States Bankruptcy
Code (11 U.S.C.ss. 101 et seq.), as amended,  and any successor statute.

                           "Blocked  Account  Agreements"  means  those  certain
Blocked Account  Agreements,  in form and substance  reasonably  satisfactory to
Lender,  each of which is among  Borrower,  Lender  and a bank at which a Retail
Store Account is located.

                           "Borrower" has the meaning set forth in the  preamble
to this Agreement.

                           "Books and Records"  means all books and  records  of
Borrower and each of its Restricted  Subsidiaries  including:  ledgers;  records
indicating,   summarizing,   or  evidencing   Borrower's   or  such   Restricted
Subsidiary's properties or assets (including the Collateral) or liabilities; all
information  relating to Borrower's  or such  Restricted  Subsidiary's  business
operations  or  financial  condition;  and all computer  programs,  disk or tape
files, printouts, runs, or other computer prepared information.

                           "Borrowing Base" has the meaning set forth in Section
2.1(a).

                           "Business  Day" means any day that is not a Saturday,
Sunday,  or other day on which national banks located in Atlanta,  Georgia,  New
York, New York or Los Angeles, California are authorized or required to close.

                           "Capitalized  Lease  Obligations"  shall  mean,  with
respect to any Person,  the  obligations  of such Person  under a lease that are
required to be classified and accounted for as capital lease  obligations  under
GAAP, and for purposes of this definition, the amount of such obligations at any
date  shall  be the  capitalized  amount  of such  obligations  at such  date as
determined in accordance with GAAP.

                           "CERCLA"   means   the   Comprehensive  Environmental
Response, Compensation and Liability Act of 1980.


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<PAGE>

                           "Change of Control" means (a) any "person" or "group"
(within the meaning of Sections  13(d) and 14(d)(2) of the Exchange Act) becomes
the  "beneficial  owner"  (as  defined in Rule 13d-3  under the  Exchange  Act),
directly or  indirectly,  of more than  thirty-five  percent  (35%) of the total
voting power of all classes of stock then  outstanding  of Borrower  entitled to
vote in the election of directors or (b) during any period of  twenty-four  (24)
consecutive months,  individuals who at the beginning of such period constituted
the Board of  Directors  of  Borrower  (together  with any new  directors  whose
election by such Board or whose  nomination for election by the  stockholders of
Borrower  was approved by a majority of the  directors  then still in office who
were either  directors  at the  beginning  of such  period or whose  election or
nomination  for election  was  previously  so approved)  cease for any reason to
constitute a majority of such Board of Directors then in office.

                           "Code"  means  the  Uniform  Commercial  Code,  as in
effect in the State of Georgia from time to time.

                           "Collateral"  means all  property  and  interests  in
property and proceeds thereof now owned or hereafter acquired by Borrower or any
Restricted  Subsidiary  in or  upon  which a Lien  to  secure  any or all of the
Obligations  now or  hereafter  exists  in  favor  of  Lender,  pursuant  to the
Collateral Documents.

                           "Collateral   Documents"  means,  collectively,   (i)
the Security  Agreement,  the Pledge  Agreement,  the  Assignment of Notes,  the
Subsidiary  Guaranty,  the Subsidiary Security Agreement,  the Assignment of LLC
Interests,  the  Collateral  Assignment  of Deed of Trust,  the Blocked  Account
Agreements,  the Concentration Account Agreements,  the Lockbox Agreements,  the
Credit Card Agreements,  and all other security agreements,  mortgages, deeds of
trust,  patent  and  trademark  assignments,   lease  assignments,   guarantees,
assignments  and other similar  agreements  between  Borrower or any  Restricted
Subsidiary  and Lender now or hereafter  delivered  to Lender  pursuant to or in
connection  with  the  transactions   contemplated  hereby,  and  all  financing
statements (or comparable  documents now or hereafter  filed in accordance  with
the  Uniform  Commercial  Code  or  comparable  law)  against  Borrower  or  any
Restricted  Subsidiary as debtor in favor of Lender as secured  party,  and (ii)
any   amendments,    supplements,    modifications,    renewals,   replacements,
consolidations, substitutions and extensions of any of the foregoing.

                           "Collateral  Access   Agreement"  means  a   landlord
waiver,  mortgagee waiver,  bailee letter,  or  acknowledgment  agreement of any
warehouseman,  processor,  lessor,  consignee, or other Person in possession of,
having a Lien upon, or having rights or interests in the Equipment or Inventory,
in each case, in form and substance satisfactory to Lender,  including,  without
limitation,  the landlord  waiver  agreements set forth on Schedule C-1 attached
hereto.

                           "Collateral  Assignment of Deed of Trust" means  that
certain Collateral  Assignment of Beneficial  Interest under Deed of Trust dated
September 3, 1999, between Alexis Holdings,  Inc. and the Administrative  Agent,
with respect to certain real property in Tempe, Arizona.


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<PAGE>

                           "Collections"   means   all   cash,   checks,  notes,
instruments, and other items of payment (including, insurance proceeds, proceeds
of cash sales, rental proceeds, and tax refunds).

                           "Compliance    Certificate"   means   a   certificate
substantially  in the form of Exhibit A and  delivered  by the chief  accounting
officer of Borrower to Lender.

                           "Concentration  Accounts"  means,  collectively,  the
Sub-Concentration  Accounts and the Master Concentration  Account, and each such
Concentration Account shall be referred to herein as a "Concentration Account".

                           "Concentration   Account  Agreement"  means a Blocked
Account Agreement among Borrower,  the Concentration Account Bank and Lender, in
form and  substance  satisfactory  to Lender,  applicable  to one or more of the
Concentration Accounts.

                           "Concentration  Account  Bank" means First Union,  or
such other Person or Persons as Lender and Borrower may  designate  from time to
time.

                           "Contingent  Obligation" means,  with  respect to any
Person,  any  direct  or  indirect  liability  of that  Person,  whether  or not
contingent,  with or without  recourse,  (a) with  respect to any  Indebtedness,
lease,   dividend,   letter  of  credit  or  other   obligation   (the  "primary
obligations")  of  another  Person  (the  "primary   obligor"),   including  any
obligation of that Person (i) to purchase,  repurchase or otherwise acquire such
primary  obligations or any security therefor,  (ii) to advance or provide funds
for the payment or  discharge  of any such  primary  obligation,  or to maintain
working  capital  or equity  capital of the  primary  obligor  or  otherwise  to
maintain the net worth or solvency or any balance sheet item, level of income or
financial  condition  of  the  primary  obligor,  (iii)  to  purchase  property,
securities  or services  primarily  for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation, or (iv) otherwise to assure or hold harmless the holder
of any  such  primary  obligation  against  loss in  respect  thereof  (each,  a
"Guaranty  Obligation");  (b) with respect to any Surety  Instrument (other than
any Letter of Credit)  issued for the account of that Person or as to which that
Person is otherwise liable for reimbursement of drawings or payments;  or (c) to
purchase  any  materials,  supplies  or other  property  from,  or to obtain the
services of, another Person if the relevant  contract or other related  document
or  obligation  requires  that  payment  for such  materials,  supplies or other
property, or for such services,  shall be made regardless of whether delivery of
such  materials,  supplies or other  property is ever made or tendered,  or such
services are ever performed or tendered.

                           "Contractual Obligation"  means,  with respect to any
Person, any provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other instrument,


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<PAGE>

document or  agreement  to which such Person is a party or by which it or any of
its property is bound.

                           "Cost" means, with respect to any Eligible  Inventory
of Borrower or any of its Restricted  Subsidiaries,  the lower of cost or market
value of such  Eligible  Inventory  as  determined  on a basis  consistent  with
Borrower's or such  Restricted  Subsidiary's  current and historical  accounting
practices.

                           "Credit Card Agreement" means each  letter  agreement
between  Borrower  and a credit  card  processor,  substantially  in the form of
Exhibit B.

                           "Daily  Balance"  means  the  amount of an Obligation
owed at the end of a given day.

                           "Default" means an event, condition, or default that,
with the giving of notice,  the passage of time,  or both,  would be an Event of
Default.

                           "Deficiency"  has  the  meaning  set forth in Section
7.16.

                           "Designated    Account"    means    account    number
2090003164485 of Borrower maintained with Borrower's Designated Account Bank, or
such other deposit account of Borrower  (located within the United States) which
has been designated, in writing and from time to time, by Borrower to Lender.

                           "Designated  Account  Bank" means First Union,  whose
office is  located  at  Charlotte,  North  Carolina,  and  whose  ABA  number is
061000227 or such other bank as may be  determined  by Lender and Borrower  from
time to time.

                           "Dilution"   means,  in  each  case  based  upon  the
experience of the immediately  prior three (3) month, the result of dividing the
Dollar  amount of (a) bad debt  write-downs,  discounts,  advertising,  returns,
promotions,  credits, or other dilution with respect to the Accounts during such
period, by (b) Collections  (excluding  extraordinary items) of Borrower and its
Restricted Subsidiaries plus the Dollar amount of clause (a).

                           "Dilution   Reserve"   means,   as   of   any date of
determination,  an amount  sufficient  to reduce  Lender's  advance rate against
Eligible  Accounts by one percentage  point for each  percentage  point by which
Dilution is in excess of five percent (5%).

                           "Disbursement  Letter" means an instructional  letter
executed and delivered by Borrower to Lender  regarding the extensions of credit
to be made on the Amendment  Closing Date, the form and substance of which shall
be satisfactory to Lender.

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<PAGE>

                           "Disposition"  means (i) the sale,  lease, conveyance
or other  disposition  of  property  (other  than  sales  or other  dispositions
expressly permitted under Section 7.2(a) or Section 7.2(b),  operating leases or
subleases  entered  into in the  ordinary  course  of  business  or  Investments
permitted  under Section 7.4 or Liens permitted under Section 7.1), and (ii) the
sale  or  transfer  to  any  Person  (other  than  Borrower  or  any  Restricted
Subsidiary) by Borrower or any  Subsidiary of Borrower of any equity  securities
issued by any Subsidiary of Borrower and held by such transferor Person.

                           "Dollars or $" means United States dollars.

                           "Early Termination Premium" has the meaning set forth
in Section 3.6.

                           "EBITDA"  means,  with  respect  to  Borrower  on  a
consolidated  basis  with its  Subsidiaries  for any  period,  the Net Income of
Borrower  for such  period,  (a) plus,  without  duplication  and to the  extent
deducted in computing  Net Income for such period,  the sum of (i) income taxes,
(ii) Interest Expense,  (iii)  depreciation and amortization  expense,  and (iv)
other non-cash charges reasonably acceptable to Lender, (b) minus, to the extent
included in Net Income for such period,  extraordinary gains; provided, however,
that the EBITDA with respect to any Person or substantially all of the assets of
a Person that became a Subsidiary of, or was merged with or  consolidated  into,
Borrower or any  Subsidiary  of Borrower  during such period  shall  include the
EBITDA of such Person or the EBITDA attributable to such assets for such period.

                           "Eligible  Accounts" means those Accounts  created by
Borrower or any Restricted  Subsidiary in the ordinary course of business,  that
arise  out of  Borrower's  or such  Restricted  Subsidiary's  sale of  goods  or
rendition  of  services,   that  strictly  comply  with  each  and  all  of  the
representations  and  warranties  respecting  Accounts  made by Borrower or such
Restricted  Subsidiary to Lender in the Loan Documents,  and that are and at all
times continue to be acceptable to Lender in its reasonable  credit  judgment in
all respects;  provided, however, that standards of eligibility may be fixed and
revised  from time to time by Lender in  Lender's  reasonable  credit  judgment.
Eligible Accounts shall not include the following:

                           (a)      Accounts that the Account  Debtor has failed
to pay within ninety (90) days of invoice date or one hundred  twenty (120) days
of date of service;

                           (b)      Retail customer Accounts;

                           (c)      Accounts  owed by an Account  Debtor  or its
Affiliates  where  fifty  percent  (50%)  or more of all  Accounts  owed by that
Account Debtor (or its Affiliates) are deemed ineligible under clause (a) above;

                           (d) Accounts with respect to which the Account Debtor
is an employee, Affiliate, or agent of Borrower or any Subsidiary of Borrower;


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<PAGE>

                           (e)  Accounts  with respect to which goods are placed
on  consignment,  guaranteed  sale, sale or return,  sale on approval,  bill and
hold, or other terms by reason of which the payment by the Account Debtor may be
conditional;

                           (f)      Accounts  that are not payable in Dollars or
with  respect  to which the  Account  Debtor:  (i) does not  maintain  its chief
executive  office in the United States,  or (ii) is not organized under the laws
of the United  States or any State  thereof,  or (iii) is the  government of any
foreign country or sovereign state, or of any state, province,  municipality, or
other  political  subdivision  thereof,  or of any  department,  agency,  public
corporation,  or  other  instrumentality  thereof,  unless  (y) the  Account  is
supported by an irrevocable letter of credit satisfactory to Lender (as to form,
substance,  and issuer or domestic  confirming  bank) that has been delivered to
Lender and is  directly  drawable  by Lender,  or (z) the  Account is covered by
credit insurance in form and amount, and by an insurer, satisfactory to Lender;

                           (g) Accounts with respect to which the Account Debtor
is either (i) the United States or any department, agency, or instrumentality of
the  United  States  (exclusive,  however,  of  Accounts  with  respect to which
Borrower  or  the  applicable   Restricted   Subsidiary  has  complied,  to  the
satisfaction of Lender,  with the Assignment of Claims Act, 31 U.S.C. ss. 3727),
or (ii) any State of the United States (exclusive,  however, of Accounts owed by
any State that does not have a statutory counterpart to the Assignment of Claims
Act);

                           (h) Accounts with respect to which the Account Debtor
is a creditor of Borrower or any  Subsidiary of Borrower,  has or has asserted a
right of setoff, has disputed its liability,  or has made any claim with respect
to the Account (but only to the extent of such setoff, dispute or claim);

                           (i) Accounts with respect to an Account  Debtor whose
total obligations owing to Borrower and its Restricted Subsidiaries,  taken as a
whole,  exceed ten percent (10%) of all Eligible Accounts,  to the extent of the
obligations owing by such Account Debtor in excess of such percentage;

                           (j) Accounts with respect to which the Account Debtor
is subject to any Insolvency  Proceeding,  or becomes insolvent,  or goes out of
business;

                           (k)      Accounts  the  collection  of which  Lender,
in its  reasonable  credit  judgment,  believes  to be doubtful by reason of the
Account Debtor's financial condition;

                           (l)      Accounts  with  respect  to  which the goods
giving  rise to such  Account  have not been  shipped  and billed to the Account
Debtor,  the services  giving rise to such Account have not been  performed  and
accepted by the Account  Debtor,  or the Account  otherwise does not represent a
final sale;

                                       12
<PAGE>

                           (m)      Accounts  with  respect to which the Account
Debtor is located in the states of New Jersey,  Minnesota  or West  Virginia (or
any other state that requires a creditor to file a Business  Activity  Report or
similar  document  in order to bring  suit or  otherwise  enforce  its  remedies
against  such Account  Debtor in the courts or through any  judicial  process of
such  state),  unless  Borrower  or the  applicable  Restricted  Subsidiary  has
qualified to do business in New Jersey,  Minnesota, West Virginia, or such other
states, or has filed a Notice of Business  Activities Report with the applicable
division  of  taxation,  the  department  of  revenue,  or with such other state
offices,  as  appropriate,  for the  then-current  year,  or is exempt from such
filing requirement;

                           (n)  Accounts  that  represent  progress  payments or
other advance  billings that are due prior to the  completion of  performance by
Borrower or the  applicable  Restricted  Subsidiary of the subject  contract for
goods or services;

                           (o)  Accounts  arising  other  than  from the sale of
goods or  rendition  of services in the  ordinary  course of  Borrower's  or the
applicable Restricted Subsidiary's business;

                           (p)  Accounts representing  lease  payments  due from
doctors or optometrists;

                           (q)  Accounts  with  respect to which Lender does not
have a valid and perfected first priority security interest; and

                           (r)  To the extent determined appropriate  by  Lender
in its reasonable credit judgment,  Accounts subject to collection by an outside
claims  processor  where such Account has not yet been billed by such processor,
and credit card Accounts.

                           "Eligible   Inventory"   means  Inventory   owned  by
Borrower or any Restricted Subsidiary consisting of first quality finished goods
(including  eyeglass  frames,  eyeglass lenses,  contact lenses,  sunglasses and
related  accessories) held for sale in the ordinary course of Borrower's or such
Restricted Subsidiary's business and raw materials for such finished goods, that
are located at or in-transit between Borrower's or such Restricted  Subsidiary's
premises  identified on Schedule E-1 (as supplemented  from time to time upon at
least ten (10) days' prior written notice to Lender),  that strictly comply with
each and all of the representations and warranties  respecting Inventory made by
Borrower or such Restricted Subsidiary to Lender in the Loan Documents, and that
are and at all times  continue  to be  acceptable  to  Lender in its  reasonable
credit  judgment  in  all  respects;   provided,   however,  that  standards  of
eligibility  may be fixed and  revised  from time to time by Lender in  Lender's
reasonable  credit  judgment.  An item of  Inventory  shall not be  included  in
Eligible Inventory if:
                           (a)  it  is  not  owned  solely   by  Borrower  or  a
Restricted  Subsidiary,  or Borrower or a  Restricted  Subsidiary  does not have
good, valid, and marketable title thereto;

                                       13
<PAGE>

                           (b)  it  is  not  located  in the  United  States at
one of the  locations  set forth on Schedule E-1 (as  supplemented  from time to
time upon at least ten (10) days' prior written notice to Lender);

                           (c)  it  is  Inventory  located  within a Sam's Club,
a Meijers store or another leased  department within a retail store (i.e., not a
"free-standing"  store) which is not subject to a Collateral Access Agreement in
form and substance satisfactory to Lender;

                           (d)  it is not subject to a valid and perfected first
priority security interest in favor of Lender;

                           (e)  it  consists  of  goods  returned or rejected by
customers  of  Borrower or the  applicable  Restricted  Subsidiary,  or goods in
transit;

                           (f)  it  is  used,   obsolete  or  slow   moving,   a
restrictive or custom item,  work-in-process,  packaging and shipping materials,
supplies used or consumed in Borrower's or a Restricted  Subsidiary's  business,
Inventory  subject to a Lien in favor of any third Person,  bill and hold goods,
defective goods, "seconds," or Inventory acquired on consignment;

                           (g)  it is located on property within a United States
military  base or on property  leased by Borrower or any  Restricted  Subsidiary
from the United States government;

                           (h)      to  the  extent  determined  appropriate  by
Lender in its  reasonable  credit  judgment,  (i) it is Inventory  classified by
Borrower or a  Restricted  Subsidiary,  as  applicable,  on its general  ledger,
prepared in a manner consistent with Borrower's and the Restricted Subsidiaries'
general  ledgers  disclosed to Lender prior to the  Amendment  Closing  Date, as
either  "close  out"  or  "discontinued"  Inventory  and  which  "close  out" or
"discontinued"  Inventory has been owned by Borrower or a Restricted  Subsidiary
for an aggregate of more than six (6) months after being so classified,  (ii) it
is Inventory  constituting  non-retail  supplies,  or (iii) it is not located on
property owned or leased by Borrower or a Restricted Subsidiary or in a contract
warehouse,  in each case,  subject to a Collateral Access Agreement  executed by
the mortgagee,  lessor, the warehouseman,  or other third party, as the case may
be, and segregated or otherwise separately identifiable from goods of others, if
any, stored on the premises; or

                           (i) it is Inventory bearing a servicemark,  trademark
or name of any Person other than Borrower or a Restricted Subsidiary,  unless it
is  Inventory  which  is sold to  Borrower  or a  Restricted  Subsidiary  in the
ordinary course of Borrower's or a Restricted Subsidiary's,  as the case may be,
business for distribution and is not subject to any licensing,  patent, royalty,
trademark,  trade name or copyright  agreement  between Borrower or a Restricted
Subsidiary,  as the  case  may be,  and any  other  Person  which  prohibits  or
restricts  Lender's sale or other disposition of such Inventory pursuant to Loan
Documents.

                                       14
<PAGE>

                           "Environmental  Claims"  means  all  claims,  however
asserted,  by any  Governmental  Authority  or other Person  alleging  potential
liability  or  responsibility  for  violation of any  Environmental  Law, or for
release or injury to the environment or threat to public health, personal injury
(including  sickness,  disease or death),  property  damage,  natural  resources
damage, or otherwise  alleging liability or responsibility for damages (punitive
or otherwise),  cleanup, removal, remedial or response costs, restitution, civil
or criminal  penalties,  injunctive  relief, or other type of relief,  resulting
from or based  upon the  presence,  placement,  discharge,  emission  or release
(including intentional and unintentional, negligent and non-negligent, sudden or
non-sudden, accidental or non-accidental,  placement, spills, leaks, discharges,
emissions  or  releases) of any  Hazardous  Material  at, in, or from  Property,
whether or not owned by Borrower or any Subsidiary.

                           "Environmental   Laws"  means  all  federal, state or
local laws,  statutes,  common law duties,  rules,  regulations,  ordinances and
codes,  together with all  administrative  orders,  directed  duties,  requests,
licenses,  authorizations  and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health, safety and land use
matters;  including  CERCLA,  the Clean Air Act,  the  Federal  Water  Pollution
Control  Act of 1972,  the  Solid  Waste  Disposal  Act,  the  Federal  Resource
Conservation and Recovery Act, the Toxic  Substances  Control Act, the Emergency
Planning and Community Right-to-Know Act, the California Hazardous Waste Control
Law, the California  Solid Waste  Management,  Resource,  Recovery and Recycling
Act, the California Water Code and the California Health and Safety Code.

                           "Environmental Permits" has the meaning set  forth in
Section 5.12(b).

                           "Equipment" means all present and hereafter  acquired
machinery, machine tools, motors, equipment, furniture,  furnishings,  fixtures,
vehicles (including motor vehicles and trailers),  tools, parts and goods (other
than consumer  goods,  farm products,  or Inventory),  of Borrower or any of its
Restricted  Subsidiaries,  wherever  located,  including,  (a) any  interest  of
Borrower or any of its Restricted  Subsidiaries  in any of the foregoing and (b)
all   attachments,   accessories,   accessions,   replacements,   substitutions,
additions, and improvements to any of the foregoing.

                           "ERISA" means the Employee Retirement Income Security
Act of 1974, and regulations promulgated thereunder.

                                       15
<PAGE>

                           "ERISA   Affiliate"  means  any   trade  or  business
(whether or not  incorporated)  under common  control with  Borrower  within the
meaning of Section 414(b) or (c) of the IRC (and Sections  414(m) and (o) of the
IRC for purposes of provisions relating to Section 412 of the IRC).

                           "ERISA Event"  means  (a)  a   Reportable  Event with
respect to a Pension Plan;  (b) a withdrawal by Borrower or any ERISA  Affiliate
from a Pension Plan subject to Section 4063 of ERISA during a plan year in which
it was a substantial  employer (as defined in Section  4001(a)(2) of ERISA) or a
cessation  of  operations  which is treated as such a withdrawal  under  Section
4062(e) of ERISA; (c) a complete or partial  withdrawal by Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in  reorganization;  (d) the  filing of a notice of  intent  to  terminate,  the
treatment of a Plan  amendment as a  termination  under Section 4041 or 4041A of
ERISA,  or the  commencement  of  proceedings by the PBGC to terminate a Pension
Plan or Multiemployer  Plan; (e) an event or condition which might reasonably be
expected to constitute  grounds under Section 4042 of ERISA for the  termination
of,  or the  appointment  of a  trustee  to  administer,  any  Pension  Plan  or
Multiemployer  Plan; or (f) the  imposition  of any liability  under Title IV of
ERISA,  other than PBGC  premiums due but not  delinquent  under Section 4007 of
ERISA, upon Borrower or any ERISA Affiliate.

                           "Eurodollar Rate" means, with respect to the Interest
Period for a  Eurodollar  Rate  Advance,  the  interest  rate per annum at which
United  States  dollar  deposits  are  offered  to Wells  Fargo  Bank,  National
Association,  by major banks in the London interbank market (or other Eurodollar
Rate market  selected by Lender) on or about 11:00 a.m.  (Eastern  time) two (2)
Business  Days  prior to the  commencement  of such  Interest  Period in amounts
comparable  to the  amount of the  Eurodollar  Rate  Advances  requested  by and
available  to Borrower in  accordance  with this  Agreement,  with a maturity of
comparable duration to the Interest Period selected by Borrower.

                           "Eurodollar Rate Advances" means any Advance (or  any
portion  thereof) made or outstanding  hereunder during any period when interest
on such Advance (or portion thereof) is payable based on the Adjusted Eurodollar
Rate.

                           "Event  of  Default"  has  the  meaning set forth in
Article 8.

                           "Excess  Availability"  means,  as  of  any  date  of
determination,  the result (so long as such result is a positive  number) of (a)
Availability,  less (b) the  accounts  payable of  Borrower  and its  Restricted
Subsidiaries over sixty (60) days past due.

                           "Exchange Act" means the  Securities  Exchange Act of
1934, and regulations promulgated thereunder.

                           "Existing  Defaults"  means,  collectively,  (i)  all
defaults or events of default (other than any payment  defaults)  existing as of
the  Amendment  Closing  Date  under the Lease  Agreement  dated  April 6, 1997,
between Frame-N-Lens  Optical,  Inc. and Banc One Leasing Corporation,  and (ii)
the interest  payment  default  existing as of the  Amendment  Closing Date with
respect to the Senior Notes.

                                       16
<PAGE>

                           "Fee  Letter"  means  that  certain  agreement  dated
as of the Amendment  Closing Date setting forth the  applicable  fees for Lender
relating to this Agreement and the Loans.

                           "FEIN" means Federal Employer Identification Number.

                           "First Union"  has  the  meaning  set  forth  in  the
recitals to this Agreement.

                           "Foreign Subsidiary" means any Subsidiary of Borrower
which is organized or incorporated  under the laws of a jurisdiction  other than
the United States or any state or territory thereof.

                           "GAAP" means generally accepted accounting principles
as in effect from time to time in the United States, consistently applied.

                           "General  Intangibles"  means  all  of Borrower's and
each Restricted  Subsidiary's  present and future general  intangibles and other
personal property (including  contract rights,  rights arising under common law,
statutes, or regulations,  choses or things in action, goodwill,  patents, trade
names,  trademarks,   servicemarks,   trade  secrets,  copyrights,   blueprints,
drawings,  purchase  orders,  customer  lists,  monies due or  recoverable  from
pension funds, route lists, rights to payment and other rights under any royalty
or licensing  agreements,  infringement claims,  computer programs,  information
contained on computer disks or tapes,  literature,  reports,  catalogs,  deposit
accounts,  insurance premium rebates, tax refunds, and tax refund claims), other
than goods, Accounts, and Negotiable Collateral.

                           "GOB  Rate"  means  the  percentages determined, from
time to time,  by an appraiser  acceptable  to Foothill and using a  methodology
acceptable to Foothill in its  reasonable  credit  judgment as the percentage of
Cost of Inventory  recoverable on a going-out of business  basis,  multiplied by
eighty-five percent (85%).

                           "Governing  Documents"   means   the  certificate  or
articles  of  incorporation,  by-laws,  or  other  organizational  or  governing
documents of any Person.

                           "Governmental   Authority"   means   any   nation  or
government,  any state or other political  subdivision thereof, any central bank
(or similar monetary or regulatory  authority)  thereof,  any entity  exercising
executive,  legislative,  judicial, regulatory or administrative functions of or
pertaining  to  government,  and  any  corporation  or  other  entity  owned  or
controlled,  through  stock or capital  ownership  or  otherwise,  by any of the
foregoing.

                           "Guaranty Obligation" has the meaning  set  forth  in
the definition of "Contingent Obligation."

                                       17
<PAGE>

                           "Hazardous  Materials"  means  all  those  substances
that are  regulated  by,  or which may form the basis of  liability  under,  any
Environmental  Law,  including any substance  identified under any Environmental
Law as a pollutant, contaminant, hazardous waste, hazardous constituent, special
waste, hazardous substance, hazardous material, or toxic substance, or petroleum
or petroleum derived substance or waste.

                           "Indebtedness"  means,  with respect to  any  Person,
(a) all  obligations of such Person for borrowed  money,  (b) all obligations of
such Person evidenced by bonds, debentures,  notes, or other similar instruments
and all  reimbursement or other obligations of such Person in respect of letters
of  credit,  bankers  acceptances,  interest  rate  swaps,  or  other  financial
products,  (c) all  obligations  of such Person under  capital  leases,  (d) all
obligations  or liabilities of others secured by a Lien on any property or asset
of such Person, irrespective of whether such obligation or liability is assumed,
and (e) any  obligation  of such Person  guaranteeing  or intended to  guarantee
(whether guaranteed,  endorsed,  co-made,  discounted,  or sold with recourse to
such  Person) any  indebtedness,  lease,  dividend,  letter of credit,  or other
obligation of any other Person.

                           "Indemnified Liabilities" has the  meaning  set forth
in Section 11.3.

                           "Indemnified Person" has  the  meaning set  forth  in
Section 11.3.

                           "Indenture"  means   that   certain  Indenture  dated
as of October 8, 1998 among Borrower,  as issuer,  the guarantors  named therein
and State Street Bank and Trust company, as trustee.

                           "Independent  Auditor"  has  the meaning set forth in
Section 6.1(a).

                           "Insolvency   proceeding"   means   any    proceeding
commenced by or against any Person under any provision of the Bankruptcy Code or
under any other  bankruptcy or insolvency  law,  assignments  for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization,  arrangement, or other similar
relief.

                           "Intangible  Assets"  means,  with   respect  to  any
Person, that portion of the book value of all of such Person's assets that would
be treated as intangibles under GAAP.

                           "Interest Expense" means, with  respect to any Person
on a  consolidated  basis  for  any  period,  interest  expense  and  loan  fees
determined   in   accordance   with  GAAP,   and   including   capitalized   and
non-capitalized  interest  and  the  interest  component  of  Capitalized  Lease
Obligations.  Unless the context clearly  provides  otherwise,  any reference to
Interest  Expense in this Agreement shall be to the Interest Expense of Borrower
and its Subsidiaries on a consolidated basis.

                                       18
<PAGE>

                           "Interest  Payment  Date"  means  any  date  for  the
scheduled  payment of interest on the Senior  Notes  under the  Indenture  as in
effect on the date hereof.

                           "Interest  Period" means,  for  any  Eurodollar  Rate
Advance,  the period commencing on the Business Day such Eurodollar Rate Advance
is disbursed  or  continued,  or on the  Business Day on which a Reference  Rate
Advance is converted to such  Eurodollar  Rate  Advance,  and ending on the date
ninety (90) days thereafter.

                           "Inventory"  means  all present and future  inventory
in which Borrower or a Restricted  Subsidiary has any interest,  including goods
held for sale or lease or to be furnished under a contract of service and all of
Borrower's and each  Restricted  Subsidiary's  present and future raw materials,
work in process,  finished goods, and packing and shipping  materials,  wherever
located.

                           "Inventory Reserves" means reserves (determined  from
time to time by Lender in its discretion) for the estimated  reclamation  claims
of unpaid sellers of Inventory sold to Borrower or any Restricted Subsidiary.

                           "Investments"   has    the   meaning   specified   in
Section 7.4.

                           "IRC"  means  the  Internal  Revenue Code of 1986, as
amended, and the regulations thereunder.

                           "IRS"  means  the  Internal  Revenue Service, and any
Governmental  Authority  succeeding to any of its principal  functions under the
IRC.

                           "Joint Venture" means a  single-purpose  corporation,
partnership,  limited  liability  company,  joint venture or other similar legal
arrangement  (whether created by contract or conducted  through a separate legal
entity) now or  hereafter  formed by Borrower  or any of its  Subsidiaries  with
another  Person (other than Borrower or one of its Restricted  Subsidiaries)  in
order to conduct a common venture or enterprise with such Person.

                           "L/C" has the meaning set forth in Section 2.2(a).

                           "L/C  Guaranty"  has   the   meaning   set  forth  in
Section 2.2(a).

                           "Lender" has the meaning set forth in the preamble to
this Agreement.

                           "Lender Account"  has   the   meaning  set  forth  in
Section 2.7.

                                       19
<PAGE>

                           "Lender  Expenses"  means   all:  costs  or  expenses
(including taxes, and insurance premiums) required to be paid by Borrower or any
Subsidiary of Borrower under any of the Loan Documents that are paid or incurred
by  Lender;  fees or  charges  paid or  incurred  by Lender in  connection  with
Lender's  transactions  with Borrower and its Subsidiaries,  including,  fees or
charges   for    photocopying,    notarization,    couriers   and    messengers,
telecommunication,  public record searches (including tax lien, litigation,  and
UCC searches and including  searches with the patent and trademark  office,  the
copyright  office,  or the  department of motor  vehicles),  filing,  recording,
publication, and appraisal (including periodic Collateral appraisals); costs and
expenses  incurred by Lender in the  disbursement  of funds to Borrower (by wire
transfer or  otherwise);  charges paid or incurred by Lender  resulting from the
dishonor of checks; costs and expenses paid or incurred by Lender to correct any
default or enforce any provision of the Loan Documents, or in gaining possession
of, maintaining, handling, preserving, storing, shipping, selling, preparing for
sale,  or  advertising  to  sell  the  Collateral,   or  any  portion   thereof,
irrespective  of  whether  a sale is  consummated;  costs and  expenses  paid or
incurred by Lender in  examining  the Books and  Records;  costs and expenses of
third party  claims or any other suit paid or incurred by Lender in enforcing or
defending the Loan Documents or in connection with the transactions contemplated
by the Loan Documents or Lender's  relationship  with Borrower or any guarantor;
and Lender's  reasonable  attorneys'  fees and  expenses,  actually  incurred in
advising,   structuring,   drafting,   reviewing,    administering,    amending,
terminating,  enforcing  (including,  without limitation,  reasonable attorneys'
fees  and  expenses   actually  incurred  in  connection  with  a  "workout,"  a
"restructuring,"  or  an  Insolvency   Proceeding  concerning  Borrower  or  any
guarantor of the  Obligations),  defending,  or concerning  the Loan  Documents,
irrespective of whether suit is brought.

                           "Letter of Credit" means an L/C  or  an L/C Guaranty,
as the context requires.

                           "Lien"  means  any  interest in property  securing an
obligation  owed to,  or a claim  by,  any  Person  other  than the owner of the
property,  whether such interest shall be based on the common law,  statute,  or
contract, whether such interest shall be recorded or perfected, and whether such
interest shall be contingent  upon the occurrence of some future event or events
or the existence of some future  circumstance  or  circumstances,  including the
lien or security interest arising from a mortgage,  deed of trust,  encumbrance,
pledge,  hypothecation,  assignment,  deposit  arrangement,  security agreement,
adverse claim or charge,  conditional  sale or trust  receipt,  or from a lease,
consignment,  or bailment for security purposes and also including reservations,
exceptions,  encroachments,  easements,  rights-of-way,  covenants,  conditions,
restrictions, leases, and other title exceptions and encumbrances affecting Real
Property.

                           "Loan  Account"  has  the   meaning   set   forth  in
Section 2.10.

                                       20
<PAGE>

                           "Loan   Documents"   means   this    Agreement,   the
Disbursement Letter, the Letters of Credit, the Collateral  Documents,  any note
or notes  executed by Borrower  and payable to Lender,  and any other  agreement
entered into, now or in the future, in connection with this Agreement.

                           "Loans"  means,  collectively,  the  Advances and the
Term Loans.

                           "Lockbox  Account"  shall mean a  depositary  account
established pursuant to one of the Lockbox Agreements.

                           "Lockbox  Agreements"  means  those  certain  Lockbox
Operating Procedural Agreements and those certain Depository Account Agreements,
in form and substance  satisfactory to Lender,  each of which is among Borrower,
Lender and one of the Lockbox Banks.

                           "Lockbox   Banks"  means  First Union,  or such other
Person or Persons as Lender and Borrower may designate from time to time.

                           "Lockboxes" has the meaning set forth in Section 2.7.

                           "Managed   Care   Subsidiary"  shall   mean  (a  NVAL
VisionCare  Systems  of  California,  Inc.,  ProCare  Eye  Exam,  Inc.  and NVAL
VisionCare  Systems of North  Carolina,  Inc.  and (b) any other  Subsidiary  of
Borrower  formed or acquired  after the Amendment  Closing Date whose  financial
condition or activities are regulated  under the laws of any state in connection
with its  provision  of health or vision care  products or services  (or related
administrative  services) and shall include,  and without  limitation,  a health
maintenance   organization  (whether  single  or  multi  service),  third  party
administrator or any entity similar to any of the foregoing.

                           "Margin  Stock" means "margin  stock" as such term is
defined in Regulation U or X of the Board of Governors
of the Federal Reserve System.

                           "Master Concentration  Account" means account  number
2080000695022 of Borrower maintained at the Concentration  Account Bank, or such
other deposit  account of Borrower  (located in the United  States),  into which
cash  received in the  Lockbox,  the other  Concentration  Accounts  and certain
Retail Store Accounts is wire transferred as provided in Section 2.7.

                           "Material  Adverse   Effect"  means  (a)  a  material
adverse change in, or a material adverse effect upon, the operations,  business,
properties,  condition  (financial  or otherwise) or prospects of Borrower or of
Borrower and its Subsidiaries taken as a whole; (b) a material impairment of the
ability of  Borrower  or any  Restricted  Subsidiary  to perform  under any Loan
Document;  or (c) a material  adverse  effect upon (i) the  legality,  validity,
binding effect or enforceability  against Borrower or any Restricted  Subsidiary
of any Loan  Document,  or (ii) the  perfection  or priority of any Lien granted
under any of the Collateral Documents.

                                       21
<PAGE>

                           "Material  Contracts"  has  the  meaning set forth in
Section 5.25.

                           "Maturity  Date"  has   the  meaning   set  forth  in
Section 3.4.

                           "Maximum Amount" means $25,000,000.

                           "Maximum  Revolving  Amount" means, as of any date of
determination,  the  result  of (a) the  Maximum  Amount,  minus  (b)  the  then
outstanding aggregate principal balance of the Term Loans.

                           "Meijer" means Meijer, Inc.

                           "Multiemployer  Plan"  means a "multiemployer  plan",
within the  meaning of Section  4001(a)(3)  of ERISA,  to which  Borrower or any
ERISA Affiliate  makes,  is making,  or is obligated to make  contributions  or,
during the preceding three calendar years,  has made, or been obligated to make,
contributions.

                           "Negotiable  Collateral" means all of  Borrower's and
each  Restricted  Subsidiary's  present  and future  letters  of credit,  notes,
drafts,  instruments,  investment property,  security  entitlements,  securities
(including  the shares of stock of  Subsidiaries  of Borrower or any  Restricted
Subsidiary),  documents,  personal  property  leases  (wherein  Borrower  or any
Restricted  Subsidiary  is the  lessor),  chattel  paper,  and Books and Records
relating to any of the foregoing.

                           "Net Income" means,  with respect to any Person on  a
consolidated  basis for any period,  its net income (or deficit)  determined  in
accordance  with GAAP.  Unless  the  context  clearly  provides  otherwise,  any
reference to Net Income in this Agreement shall be to the Net Income of Borrower
and its Subsidiaries on a consolidated basis.

                           "Net  Proceeds"  means,  as  to  any Disposition by a
Person,  proceeds in cash, checks or other cash equivalent financial instruments
as and when  received by such Person,  net of: (a) the direct costs  relating to
such  Disposition  excluding  amounts payable to such Person or any Affiliate of
such Person, (b) income, sale, use or other transaction taxes paid or payable by
such Person as a direct result thereof,  and (c) amounts  required to be applied
to  repay  principal,   interest  and  prepayment   premiums  and  penalties  on
Indebtedness  secured  by a Lien  on the  asset  which  is the  subject  of such
Disposition  and (d)  appropriate  amounts  to be set aside by such  Person as a
reserve,  in accordance with GAAP, against any liabilities  associated with such
Disposition  and  retained  by such  Person  after such  Disposition,  including
without  limitation  pension  and  other  post-employment  benefit  liabilities,
liabilities   related  to  environment   matters  and   liabilities   under  any
indemnification obligations associated with such Disposition.

                                       22
<PAGE>

                           "Obligations"  means  all  Loans,  debts,  principal,
interest  (including any interest that, but for the provisions of the Bankruptcy
Code,  would  have  accrued),  contingent  reimbursement  obligations  under any
outstanding Letters of Credit,  premiums (including Early Termination Premiums),
liabilities  (including all amounts charged to Borrower's Loan Account  pursuant
hereto),  obligations,  fees, charges,  costs, or Lender Expenses (including any
fees or expenses that, but for the provisions of the Bankruptcy Code, would have
accrued), lease payments, guaranties, covenants, and duties owing by Borrower to
Lender of any kind and description (whether pursuant to or evidenced by the Loan
Documents or pursuant to any other  agreement  between Lender and Borrower,  and
irrespective  of whether for the payment of money),  whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
and including any debt,  liability,  or obligation owing from Borrower to others
that Lender may have obtained by assignment or otherwise,  and further including
all interest not paid when due and all Lender Expenses that Borrower is required
to pay or reimburse by the Loan Documents, by law, or otherwise.

                           "Overadvance"   has   the   meaning   set   forth  in
Section 2.5.

                           "Participant"  means any Person to which  Lender  has
sold a participation interest in its rights under the Loan Documents.

                           "PBGC"   means    the   Pension    Benefit   Guaranty
Corporation,  or any Governmental  Authority  succeeding to any of its principal
functions under ERISA.

                           "Pension  Plan" means a pension  plan (as  defined in
Section  3(2) of ERISA)  subject to Title IV of ERISA which  Borrower  sponsors,
maintains,   or  to  which  it  makes,  is  making,  or  is  obligated  to  make
contributions,  or in the case of a  multiple  employer  plan (as  described  in
Section  4064(a)  of  ERISA)  has  made  contributions  at any time  during  the
immediately preceding five (5) plan years.

                           "Permitted  Liens"  has  the  meaning  set  forth  in
Section 7.1.

                           "Permitted  Protest"  means  the right of Borrower or
any  Restricted  Subsidiary  to  protest  any Lien other than any such Lien that
secures  the  Obligations,  provided  that (a) a reserve  with  respect  to such
obligation is established on the books of Borrower or such Restricted Subsidiary
in an amount that is reasonably  satisfactory to Lender in its reasonable credit
judgment,  (b) any such  protest is  instituted  and  diligently  prosecuted  by
Borrower  or such  Restricted  Subsidiary  in good  faith,  and  (c)  Lender  is
satisfied that,  while any such protest is pending,  there will be no impairment
of the  enforceability,  validity,  or priority of any of the Liens of Lender in
and to the Collateral.

                                       23
<PAGE>

                           "Person   means   and   includes   natural   persons,
corporations,   limited  liability  companies,  limited  partnerships,   general
partnerships,  limited  liability  partnerships,  joint ventures,  trusts,  land
trusts,  business trusts, or other  organizations,  irrespective of whether they
are legal  entities,  and  governments  and agencies and political  subdivisions
thereof.

                           "Plan" means an employee  benefit plan (as defined in
Section 3(3) of ERISA) which Borrower sponsors or maintains or to which Borrower
makes, is making, or is obligated to make contributions and includes any Pension
Plan.

                           "Pledge  Agreement"  means  that certain  Amended and
Restated   Pledge   Agreement  of  even  date  herewith  among   Borrower,   the
Administrative  Agent and Lender, in form and substance  satisfactory to Lender,
together  with any  supplement  thereto  executed and  delivered  after the date
hereof between Borrower and Lender.

                           "Pledged Collateral" has the meaning specified in the
Pledge Agreement.

                           "Prior Credit Agreement" has the meaning set forth in
the recitals to this Agreement.

                           "Purchase Money Indebtedness " means any Indebtedness
of Borrower or its Restricted Subsidiaries incurred for the purpose of financing
all or any part of the purchase price or the cost of installation,  construction
or improvement of any property.

                           "Qualified  Proceeds " means any of the  following or
any combination of the following: (i) cash, (ii) cash equivalents,  (iii) assets
that  are  used or  usable  in the  business  of  Borrower  and  its  Restricted
Subsidiaries as existing on the Amendment Closing Date or a business  reasonably
related or  complimentary  thereto and (iv) capital stock of any Person  engaged
primarily  in the  business  of  Borrower  and its  Restricted  Subsidiaries  as
existing  on the  Amendment  Closing  Date or a business  reasonably  related or
complimentary  thereto so long as, in connection with the receipt by Borrower or
any  Restricted  Subsidiary of Borrower of such capital  stock,  (A) such Person
becomes a  Restricted  Subsidiary  or (B) such  Person is merged with or into or
transfers or conveys substantially all or all of its assets to, or is liquidated
into, Borrower or any Restricted Subsidiary.

"Reference Rate" means the variable rate of interest,  per annum,  most recently
announced by Wells Fargo Bank, National  Association,  or any successor thereto,
as its "base rate," irrespective of whether such announced rate is the best rate
available from such financial institution.

                                       24
<PAGE>

                           "Requirement of Law" means, as to any Person, any law
(statutory  or  common),  treaty,  rule or  regulation  or  determination  of an
arbitrator or of a Governmental Authority, in each case applicable to or binding
upon the  Person or any of its  property  or to which  the  Person or any of its
property is subject.

                           "Reserve  Percentage" means and refers to, as  of the
date of  determination  thereof;  the maximum  percentage  (rounded  upward,  if
necessary to the nearest  1/100th of one percent (1%)),  as determined by Lender
(or its Affiliates) in accordance with its (or their ) usual  procedures  (which
determination  shall be conclusive in the absence of manifest error), that is in
effect on such date as prescribed by the Federal  Reserve Board for  determining
the  reserve  requirements  (including  supplemental,  marginal,  and  emergency
reserve  requirements) with respect to eurocurrency  funding (currently referred
to as "eurocurrency liabilities") by Lender or its Affiliates.

                           "Responsible   Officer"  means  the  chief  executive
officer, the chief financial officer or the president of Borrower,  or any other
officer having  substantially  the same authority and  responsibility;  or, with
respect to compliance with financial covenants, the chief financial officer, the
controller  or  the  treasurer  of  Borrower,   or  any  other  officer   having
substantially the same authority and responsibility.

                           "Restricted  Payments"  has  the meaning set forth in
Section 7.10.

                           "Restricted Subsidiary"  means any direct or indirect
Subsidiary of Borrower other than an Unrestricted Subsidiary.

                           "Retail Store Accounts" means those bank accounts set
forth on  Schedule  6.14 other  than the  Lockbox  Account or the  Concentration
Accounts.

                           "Revolving  Facility Usage" means,  as of any date of
determination,  the  aggregate  amount of Advances  and undrawn or  unreimbursed
Letters of Credit outstanding.

                           "Sam's Club" means Sam's Club a division of Wal-Mart.

                           "SEC"  means  the Securities and Exchange Commission,
or any Governmental Authority succeeding to any of its principal functions.

                           "Security  Agreement" means that certain Amended  and
Restated  Security   Agreement  of  even  date  herewith  among  Borrower,   the
Administrative Agent and Lender, in form and substance satisfactory to Lender.

                           "Senior Notes" means those certain  senior  unsecured
notes due 2005 issued by Borrower pursuant to the Indenture.

                                       25
<PAGE>

                           "Solvent"  means,  as to any Person at any time, that
(a) the fair value of the  property of such Person is greater than the amount of
such Person's  liabilities  (including  disputed,  contingent  and  unliquidated
liabilities) as such value is established and liabilities evaluated for purposes
of Section  101(31) of the Bankruptcy  Code; (b) the present fair saleable value
of the property of such Person is not less than the amount that will be required
to pay the  probable  liability  of such  Person  on its  debts  as they  become
absolute and  matured;  (c) such Person is able to realize upon its property and
pay  its  debts  and  other  liabilities  (including  disputed,  contingent  and
unliquidated  liabilities) as they mature in the normal course of business;  (d)
such Person does not intend to, and does not believe  that it will,  incur debts
or liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a transaction,  and is
not  about to engage in  business  or a  transaction,  for which  such  Person's
property would constitute unreasonably small capital.

                           "Sub-Concentration   Accounts"   means   those   bank
accounts  of Borrower at the  Concentration  Account  Bank set forth on Schedule
S-1.

                           "Subsidiary"  of  a  Person  means  any  corporation,
association,  partnership,  limited  liability  company,  joint venture or other
business  entity of which more than  fifty  percent  (50%) of the voting  stock,
membership  interests or other equity  interests  (in the case of Persons  other
than corporations), is owned or controlled directly or indirectly by the Person,
or one or more of the  Subsidiaries  of the Person,  or a  combination  thereof.
Unless  the  context  otherwise   clearly  requires,   references  herein  to  a
"Subsidiary" refer to a Subsidiary of Borrower.

                           "Subsidiary Guaranty"  eans that certain  Amended and
Restated  Subsidiary  Guaranty  of  even  date  herewith  among  the  Restricted
Subsidiaries,  the  Administrative  Agent  and  Lender,  in form  and  substance
satisfactory to Lender, together with any supplement thereto.

                           "Subsidiary  Pledge  Agreement"  means  that  certain
Amended and Restated Subsidiary Pledge Agreement of even date herewith among the
Restricted  Subsidiaries,  the  Administrative  Agent  and  Lender,  in form and
substance satisfactory to Lender, together with any supplement thereto.

                           "Subsidiary  Security  Agreement" means that  certain
Amended and Restated  Subsidiary  Security Agreement of even date herewith among
the Restricted  Subsidiaries,  the Administrative  Agent and Lender, in form and
substance satisfactory to Lender, together with any supplement thereto.

                           "Surety  Instruments"  means  all  letters  of credit
(including  standby and  commercial),  banker's  acceptances,  bank  guaranties,
shipside bonds, surety bonds and similar instruments.

                                       26
<PAGE>

                           "Term A Monthly  Interest  Rate  Adjustment"  has the
meaning set forth in Section 2.6(a)(iii).

                           "Term  A  Option Fee"  has  the  meaning set forth in
Section 2.3(a).

                           "Term  A   Rate"  has   the   meaning  set  forth  in
Section 2.6(a)(iii).

                           "Term B Monthly  Interest  Rate  Adjustment"  has the
meaning set forth in Section 2.6(a)(iv).

                           "Term  B  Option  Fee"  has  the meaning set forth in
Section 2.3(b).

                           "Term   B  Rate"  has   the   meaning  set  forth  in
Section 2.6(a)(iv).

                           "Term   Loan   A"   has  the  meaning  set  forth  in
Section 2.3(a).

                           "Term   Loan   B"   has   the   meaning  set forth in
Section 2.3(b).

                           "Term  Loans"  means,  collectively,  Term Loan A and
Term Loan B.

                           "Unfunded  Pension  Liability"  means the excess of a
Plan's benefit  liabilities under Section 4001(a)(16) of ERISA, over the current
value of that Plan's assets,  determined in accordance with the assumptions used
for  funding  the  Pension  Plan  pursuant  to  Section  412 of the  IRC for the
applicable plan year.

                           "Unrestricted   Subsidiaries"   means   the   Foreign
Subsidiaries,  the Managed Care  Subsidiaries  and each other direct or indirect
Subsidiary of Borrower  designated as an  "Unrestricted  Subsidiary" by Borrower
and such  designation is consented to by Lender;  provided,  however,  that each
Managed Care  Subsidiary  existing on the  Amendment  Closing Date shall use its
reasonable efforts to obtain the approval of the requisite regulatory entity for
it to become a  Restricted  Subsidiary  as  promptly  as  practicable  after the
Amendment  Closing Date and each Person which becomes a Managed Care  Subsidiary
after the Amendment Closing Date shall use its reasonable  efforts to obtain the
requisite  regulatory  approval  for it to  become a  Restricted  Subsidiary  as
promptly as  practicable  after it becomes a Managed Care  Subsidiary;  provided
further that with regard to any domestic Subsidiary of Borrower formed after the
Amendment  Closing  Date which is or seeks to become a Managed  Care  Subsidiary
such  Subsidiary's  obligations  as a Restricted  Subsidiary  under a Subsidiary
Guaranty, Subsidiary Security Agreement and Subsidiary Pledge Agreement (if

                                       27
<PAGE>

applicable) to be issued  pursuant to Section 6.16 of this Agreement  shall only
become  effective  if (a) the  approval of the  requisite  regulatory  entity is
obtained (if such approval is required)  and (b) the granting of the  Subsidiary
Guaranty,  Subsidiary  Security  Agreement and Subsidiary  Pledge  Agreement (if
applicable) by such Subsidiary shall not have a material adverse effect upon the
business, operations, assets, condition (financial or otherwise) or prospects of
such  Subsidiary (a "material  adverse  effect");  provided that if a Subsidiary
Guaranty,  Subsidiary  Security  Agreement and Subsidiary  Pledge  Agreement (if
applicable)  is not issued by such  Subsidiary in reliance on the  provisions of
this clause (b),  Borrower  shall  deliver an  officers'  certificate  to Lender
stating  that the  granting of such  Subsidiary  Guaranty,  Subsidiary  Security
Agreement and Subsidiary  Pledge Agreement (if applicable) would have a material
adverse effect, and provided,  further that such obligation under the Subsidiary
Guaranty shall be limited to the maximum amount which such  Subsidiary  would be
permitted  to declare or pay as a dividend  in  compliance  with the  applicable
rules or regulations of, or undertakings  made to, any regulatory  entity having
jurisdiction and authority over such  Subsidiary.  No Subsidiary of Borrower may
be designated as an Unrestricted  Subsidiary hereunder if it is a "Guarantor" as
defined in the Indenture as in effect on the Amendment Closing Date.

                           "Voidable  Transfer"  has  the  meaning  set forth in
Section 15.8.

                           "Wachovia Swap Obligations" has the meaning set forth
in Section 7.5(e).

                           "Wal-Mart   means  Wal-Mart  Stores, Inc., a Delaware
corporation.

                           "Wal-Mart Master Lease Agreement"  means that certain
Vision Center Master License Agreement dated as of June 16, 1994, by and between
Wal-Mart and Borrower, and all Addenda and Attachments thereto.

                  1.2 Accounting  Terms.  All accounting  terms not specifically
defined herein shall be construed in accordance with GAAP. When used herein, the
term  "financial  statements"  shall  include the notes and  schedules  thereto.
Whenever  the term  "Borrower"  is used in respect of a financial  covenant or a
related  definition,  it shall be understood to mean Borrower on a  consolidated
basis with its Subsidiaries unless the context clearly requires otherwise.

                  1.3 Code. Any terms used in this Agreement that are defined in
the  Code  shall be  construed  and  defined  as set  forth  in the Code  unless
otherwise defined herein.

                  1.4 Construction. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, references to
the singular include the plural,  the term "including" is not limiting,  and the
term "or" has, except where otherwise indicated, the inclusive meaning

                                       28
<PAGE>

represented  by the phrase  "and/or." The words  "hereof,"  "herein,"  "hereby,"
"hereunder,"  and similar terms in this  Agreement  refer to this Agreement as a
whole and not to any particular provision of this Agreement. An Event of Default
shall  "exist",  "continue" or be  "continuing"  until such Event of Default has
been waived in writing by Lender.  Section,  subsection,  clause,  schedule, and
exhibit  references  are to  this  Agreement  unless  otherwise  specified.  Any
reference in this Agreement or in the Loan Documents to this Agreement or any of
the  Loan  Documents  shall  include  all  alterations,   amendments,   changes,
extensions,   modifications,   renewals,   replacements,    substitutions,   and
supplements, thereto and thereof, as applicable.

                  1.5 Schedules and Exhibits.  All of the schedules and exhibits
attached to this Agreement shall be deemed incorporated herein by reference.

         20       LOAN AND TERMS OF PAYMENT.

                  2.1      Revolving Advances.

                           (a)      Subject to the terms and conditions of this
Agreement,  Lender  agrees  to make  advances  ("Advances")  to  Borrower  in an
aggregate amount outstanding not to exceed at any one time the lesser of (i) the
Maximum Revolving Amount less the aggregate  outstanding  balance of all undrawn
or unreimbursed Letters of Credit, or (ii) the Borrowing Base less the aggregate
outstanding  balance of all  undrawn  or  unreimbursed  Letters  of Credit.  For
purposes of this Agreement,  "Borrowing  Base", as of any date of determination,
shall mean the result of:

                           (I)      the lowest of:

                                    (v) seventy-five percent (75%) of EBITDA for
                  the most recent  twelve (12) month period for which  financial
                  statements  have been  provided to Lender  pursuant to Section
                  6.1(c);

                                    (w) one  hundred  fifty  percent  (150%)  of
                  EBITDA for the most recent  twelve (12) month period for which
                  financial  statements have been provided to Lender pursuant to
                  Section  6.1(c),  less the aggregate  principal  amount of the
                  Term Loans then outstanding; and

                                    (x)     the sum of:

                                                     (A)      the lowest  of (i)
                          $7,500,000, (ii) eighty-five percent (85%) of Eligible
                          accounts,  less the amount,  if any,  of the  Dilution
                          Reserve,  and (iii) an amount equal to one-sixth (1/6)
                          of   Collections   of  Borrower  and  its   Restricted
                          Subsidiaries   with   respect  to  Accounts   for  the
                          immediately preceding sixty (60) day period, plus


                                       29
<PAGE>

                                                     (B)      the lowest  of (i)
                          $12,000,000,  (ii) thirty percent (30%) of the Cost of
                          Eligible  Inventory,  less the aggregate amount of the
                          Inventory Reserves, and (iii) the GOB Rate of the Cost
                          of Eligible  Inventory as determined based on the most
                          recent appraisals thereof less the aggregate amount of
                          the Inventory Reserves; and

                                    (y) an amount  equal to  one-third  (1/3) of
                  Collections of Borrower and its Restricted  Subsidiaries  with
                  respect to Accounts for the  immediately  preceding sixty (60)
                  day period; and

                                    (z) an amount equal to  two-thirds  (2/3) of
                  Collections of Borrower and its Restricted  Subsidiaries  with
                  respect to Accounts for the  immediately  preceding sixty (60)
                  day period,  less the aggregate  principal  amount of the Term
                  Loans then outstanding,

                           minus,

                           (II) (without  duplication)  the aggregate  amount of
                  reserves,  if any, established by Lender under Section 2.1(b),
                  Section 2.1(c) and Article 10 hereof.

                           (b)      Anything  to  the  contrary  in this Section
notwithstanding,  Lender shall have the right to establish  reserves against the
Borrowing Base or adjust the standards of eligibility in such amounts as Lender,
in its reasonable judgment (from the perspective of an asset-based lender) shall
deem  necessary or  appropriate,  including  (x) reserves on account of (i) sums
that  Borrower  is  required  to pay  (such  as  taxes,  assessments,  insurance
premiums, or, in the case of leased assets, rents or other amounts payable under
such  leases) and has failed to pay under any Section of this  Agreement  or any
other Loan Document, (ii) without duplication of the foregoing, amounts owing by
Borrower to any Person to the extent secured by a Lien on, or trust over, any of
the Collateral,  which Lien or trust, in the reasonable  determination of Lender
(from  the  perspective  of an  asset-based  lender),  would be likely to have a
priority  superior to the Liens of Lender  (such as landlord  liens,  ad valorem
taxes, or sales taxes where given priority under  applicable law) in and to such
item of  Collateral,  and (y)  reserves  to the extent  that the final audit and
appraisal  referenced in Section 3.3(c) received by Foothill after the Amendment
Closing Date reveal any material negative variances from the preliminary results
of such reports delivered to Lender prior to the Amendment Closing Date.

                           (c)  Lender  shall  have  the  right to  establish  a
reserve  against the  Borrowing  Base,  commencing  on December 1, 1999,  in the
amount of $1,000,000,  which reserve shall increase by an additional  $1,000,000
as of the first day of each month thereafter, provided that such reserve shall


                                       30
<PAGE>

reduce to zero on that date which is two (2) Business Days prior to any Interest
Payment Date and  increased by an  additional  $1,000,000 as of the first day of
the immediately succeeding month and each month thereafter.

                           (d) Lender shall have no  obligation to make Advances
hereunder to the extent they would cause the  outstanding  Obligations to exceed
the Maximum Revolving Amount.

                           (e)      Amounts borrowed  pursuant  to this  Section
2.1 may be repaid and,  subject to the terms and  conditions of this  Agreement,
reborrowed at any time during the term of this Agreement.

                  2.2      Letters of Credit.

                           (a)      Subject to the terms and conditions  of this
Agreement,  Lender agrees to issue letters of credit for the account of Borrower
(each, an "L/C") or to issue guarantees of payment (each such guaranty,  an "L/C
Guaranty")  with respect to letters of credit  issued by an issuing bank for the
account of Borrower. Lender shall have no obligation to issue a Letter of Credit
if any of the following would result:

                                    (i) The  aggregate  amount  of all  types of
                  undrawn and  unreimbursed  Letters of Credit  would exceed the
                  Borrowing  Base less the amount of  outstanding  Advances less
                  the  aggregate  amount  of  Inventory  Reserves  and  reserves
                  established under Section 2.1(b) and Section 2.1(c); or

                                    (ii) the aggregate  amount of all undrawn or
                  unreimbursed  Letters of Credit would exceed the lower of: (x)
                  the Maximum  Revolving  Amount less the amount of  outstanding
                  Advances less the aggregate  amount of Inventory  Reserves and
                  reserves established under Section 2.1(b),  Section 2.1(c) and
                  Article 10 hereof; or (y) $3,000,000; or

                                    (iii)  the  outstanding   Obligations  would
                  exceed the Maximum Amount.

Borrower  expressly  understands and agrees that Lender shall have no obligation
to arrange for the  issuance by issuing  banks of the letters of credit that are
to be the subject of L/C Guaranties.  Borrower and Lender  acknowledge and agree
that  certain  of the  letters  of  credit  that  are to be the  subject  of L/C
Guaranties  may be  outstanding  on the Amendment  Closing Date.  Each Letter of
Credit shall have an expiry date no later than sixty (60) days prior to the date
on which this  Agreement is scheduled  to terminate  under  Section 3.4 (without
regard to any potential renewal term) and all such Letters of Credit shall be in
form and  substance  acceptable to Lender in its sole  discretion.  If Lender is
obligated to advance funds under a Letter of Credit,  Borrower immediately shall
reimburse such amount to Lender and, in the absence of such  reimbursement,  the
amount  so  advanced  immediately  and  automatically  shall be  deemed to be an
Advance  hereunder  and,  thereafter,  shall  bear  interest  at the  rate  then
applicable to Advances under Section 2.6.

                                       31
<PAGE>

                           (b)  Borrower  hereby  agrees  to  indemnify,   save,
defend,  and hold Lender harmless from any loss,  cost,  expense,  or liability,
including  payments  made  by  Lender,   expenses,  and  actual  and  reasonable
attorneys'  fees  incurred by Lender  arising out of or in  connection  with any
Letter  of  Credit,  except  to the  extent  arising  from  Lender's  own  gross
negligence  or wilful  misconduct.  Borrower  agrees to be bound by the  issuing
bank's  regulations and  interpretations  of any Letters of Credit guaranteed by
Lender and opened to or for Borrower's account or by Lender's interpretations of
any L/C  issued  by  Lender  to or for  Borrower's  account,  even  though  this
interpretation  may be different from Borrower's  own, and Borrower  understands
and  agrees  that  Lender  shall not be liable  for any  error,  negligence,  or
mistake, whether of omission or commission, in following Borrower's instructions
or those contained in the Letter of Credit or any modifications,  amendments, or
supplements  thereto.  Borrower  understands that the L/C Guaranties may require
Lender to indemnify  the issuing bank for certain costs or  liabilities  arising
out of claims by Borrower  against such issuing bank.  Borrower hereby agrees to
indemnify,  save,  defend,  and hold Lender  harmless  with respect to any loss,
cost, expense (including,  without limitation,  actual and reasonable attorneys'
fees),  or  liability  incurred by Lender  under any L/C Guaranty as a result of
Lender's  indemnification of any such issuing bank, except to the extent arising
from Lender's own gross negligence or wilful misconduct.

                           (c) Borrower  hereby  authorizes and directs any bank
that  issues a letter of credit  guaranteed  by Lender to  deliver to Lender all
instruments,  documents, and other writings and property received by the issuing
bank  pursuant  to such letter of credit,  and to accept and rely upon  Lender's
instructions  and agreements  with respect to all matters  arising in connection
with such letter of credit and the related application.  Borrower may or may not
be the "applicant" or "account party" with respect to such letter of credit.

                           (d) Any and all charges, commissions, fees, and costs
incurred by Lender relating to the letters of credit  guaranteed by Lender shall
be  considered  Lender  Expenses  for  purposes of this  Agreement  and shall be
reimbursable by Borrower to Lender on demand.

                           (e)   Immediately   upon  the   termination  of  this
Agreement,  Borrower  agrees to either (i) provide cash collateral to be held by
Lender in an amount  equal to one  hundred  five  percent  (105%) of the maximum
amount of Lender's  obligations  under  outstanding  Letters of Credit,  or (ii)
cause to be delivered to Lender  releases of all of Lender's  obligations  under
outstanding  Letters  of  Credit.  Such cash  collateral  shall be  returned  to
Borrower  when  there are no longer  any  Letters  of  Credit  outstanding,  all
Obligations  have  been  paid in  full  in cash  and  this  Agreement  has  been
terminated.  At Lender's  discretion,  any  proceeds of  Collateral  received by
Lender after the occurrence and during the  continuation  of an Event of Default
may be held as the cash collateral required by this Section 2.2(e).

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<PAGE>

                           (f) If by reason of (i) any change in any  applicable
law,  treaty,  rule,  or  regulation  or any  change  in the  interpretation  or
application by any  governmental  authority of any such applicable law,  treaty,
rule, or regulation,  or (ii)  compliance by the issuing bank or Lender with any
direction,  request, or requirement (irrespective of whether having the force of
law) of any  governmental  authority or monetary  authority  including,  without
limitation, Regulation D of the Board of Governors of the Federal Reserve System
as from time to time in effect (and any successor thereto):

                                    (A)     any  reserve,  deposit,  or  similar
requirement  is or shall be imposed  or  modified  in respect of any  Letters of
Credit issued hereunder, or

                                    (B)     there   shall   be  imposed  on  the
issuing bank or Lender any other  condition  regarding any letter of credit,  or
Letter of Credit, as applicable, issued pursuant hereto;

and the result of the foregoing is to increase, directly or indirectly, the cost
to the issuing bank or Lender of issuing, making,  guaranteeing,  or maintaining
any  letter of  credit,  or Letter of Credit,  as  applicable,  or to reduce the
amount  receivable in respect thereof by such issuing bank or Lender,  then, and
in any such case,  Lender may, at any time within a reasonable  period after the
additional cost is incurred or the amount received is reduced,  notify Borrower,
and Borrower  shall pay on demand such amounts as the issuing bank or Lender may
specify  to be  necessary  to  compensate  the  issuing  bank or Lender for such
additional cost or reduced  receipt,  together with interest on such amount from
the date of such demand  until  payment in full thereof at the rate set forth in
Section  2.6(a)(i) or (c)(i),  as applicable.  The  determination by the issuing
bank or Lender,  as the case may be, of any amount due  pursuant to this Section
2.2(f), as set forth in a certificate  setting forth the calculation  thereof in
reasonable detail,  shall, in the absence of manifest or demonstrable  error, be
final and conclusive and binding on all of the parties hereto.

                  2.3 Term  Loan.  (a) Term  Loan A.  Subject  to the  terms and
conditions  of this  Agreement,  Lender  has  agreed  to make a term loan on the
Amendment Closing Date (the "Term Loan A") to Borrower in the original principal
amount of $2,500,000.  The outstanding  unpaid principal balance and all accrued
and  unpaid  interest  under  the Term  Loan A shall be due and  payable  on the
earlier of (x) the  Maturity  Date and (y) the  termination  of this  Agreement,
whether by its terms, by prepayment, by acceleration, or otherwise. In the event
that  Borrower  shall not have  prepaid the Term Loan A in full by December  15,
2000 (the "Adjustment  Date"),  Borrower shall, at its option,  pay to Lender on
the  Adjustment  Date in immediately  available  funds a fee (the "Term A Option
Fee") in an amount equal to one percent (1.00%) of the principal  balance of the
Term Loan A then outstanding.  If Borrower fails to pay the Term A Option Fee on
the  Adjustment  Date,  the  interest  rate  payable on the Term Loan A shall be
increased by the Term A Monthly  Interest Rate  Adjustment  set forth in Section
2.6(a)(iii)  from the  Adjustment  Date through the Maturity  Date.  All amounts
outstanding under the Term Loan A shall constitute Obligations.

                                       33
<PAGE>

                           (b)      Term  Loan  B.  Subject  to  the  terms  and
conditions  of this  Agreement,  Lender  has  agreed  to make a term loan on the
Amendment Closing Date (the "Term Loan B") to Borrower in the original principal
amount of $10,000,000.  The outstanding unpaid principal balance and all accrued
and  unpaid  interest  under  the Term  Loan B shall be due and  payable  on the
earlier of (x) the  Maturity  Date and (y) the  termination  of this  Agreement,
whether by its terms, by prepayment, by acceleration, or otherwise. In the event
that Borrower  shall not have prepaid the Term Loan B in full by the  Adjustment
Date,  Borrower  shall,  at its option,  pay to Lender on each of the Adjustment
Date and on January 15, 2001 in immediately  available  funds a fee (the "Term B
Option Fee") in an amount equal to two percent (2.00%) of the principal  balance
of the Term Loan B then outstanding.  If Borrower fails to pay the Term B Option
Fee on the  Adjustment  Date, the interest rate payable on the Term Loan B shall
be increased by the Term B Monthly Interest Rate Adjustment set forth in Section
2.6(a)(iv)  from the  Adjustment  Date  through the Maturity  Date.  All amounts
outstanding under the Term Loan B shall constitute Obligations.

                           (c) Prepayments.  The unpaid principal balance of the
Term Loans may be  voluntarily  prepaid by Borrower in whole or in part  without
penalty or premium at any time during the term of this  Agreement so long as (i)
at the time of such  prepayment  no Default or Event of Default  then  exists or
would be caused thereby,  and (ii) immediately before and after giving effect to
such prepayment,  Availability  (less a reasonable reserve for past due accounts
payable) shall be not less than  $3,000,000.  All  prepayments of the Term Loans
shall be in an amount not less than $1,000,000.  Notwithstanding anything to the
contrary  contained  herein,  so long as no  Default  or Event of  Default  then
exists,  all prepayments of the Term Loans shall be applied pro rata between the
Term Loan A and the Term Loan B.

                  2.4      [Intentionally Omitted].

                  2.5  Overadvances.  If,  at any  time or for any  reason,  the
amount of  Obligations  owed by Borrower to Lender  pursuant to Sections 2.1 and
2.2 is greater than the applicable Dollar or percentage limitations set forth in
Sections  2.1 or 2.2  (an  "Overadvance"),  Borrower  immediately  shall  pay to
Lender,  in cash, the amount of such excess to be used by Lender first, to repay
Advances outstanding under Section 2.1 and, thereafter,  to be held by Lender as
cash collateral to secure Borrower's  obligation to repay Lender for all amounts
paid pursuant to Letters of Credit.

                  2.6      Interest and Letter of Credit Fees:  Rates, Payments,
and Calculations; Promise to Pay.

                           (a)      Interest Rate.  Except as provided in clause
(b) below,  (i) all  Advances  which are  Eurodollar  Rate  Advances  shall bear
interest  on the  Daily  Balance  thereof  at a per  annum  rate  of  three  and
one-quarter  percentage points (3.25%) above the Adjusted  Eurodollar Rate, (ii)
all Advances which are Reference Rate Advances shall bear interest on the Daily

                                       34
<PAGE>

Balance  thereof at a per annum rate of two percent  (2.00%) above the Reference
Rate,  (iii) the Term Loan A shall bear interest on the Daily Balance thereof at
a per annum rate of fifteen percent (15.00%);  provided,  however,  that, in the
event Borrower  fails to pay the Term A Option Fee on the  Adjustment  Date, the
interest  rate on the Term Loan A shall  increase  each month  commencing on the
Adjustment Date through the Maturity Date (such monthly increase in the interest
rate is referred to herein as the "Term A Monthly  Interest Rate Adjustment" and
the  interest  rate on the Term Loan A as so  increased is referred to herein as
the "Term A Rate") by an  additional  one-eighth  of one percent  (0.125%) , and
(iv) the Term Loan B shall bear interest on the Daily  Balance  thereof at a per
annum rate of fifteen percent (15.00%);  provided,  however,  that, in the event
Borrower fails to pay the Term B Option Fee on the Adjustment Date, the interest
rate on the Term Loan B shall  increase each month  commencing on the Adjustment
Date through the Maturity  Date (such  monthly  increase in the interest rate is
referred  to herein as the "Term B Monthly  Interest  Rate  Adjustment"  and the
interest  rate on the Term Loan B as so  increased  is referred to herein as the
"Term B Rate") by an additional three-eighths of one percent (0.375%).

                           (b)      Letter  of  Credit Fee.  Borrower  shall pay
Lender a fee (in addition to the charges, commissions, fees, and costs set forth
in Section 2.2(d)) equal to one and one-half percent (1.50%) per annum times the
aggregate  undrawn amount of all Letters of Credit that were outstanding  during
the immediately preceding month.

                           (c)      Default  Rate.   Upon  the   occurrence  and
during the continuation of an Event of Default,  (i) all Obligations (except for
undrawn  Letters of Credit and the Term Loan)  shall bear  interest on the Daily
Balance  thereof  at a per annum rate equal to four  percentage  points  (4.00%)
percentage  points  above the  Reference  Rate,  (ii) the Term Loan A shall bear
interest  on  the  Daily  Balance  thereof  at a per  annum  rate  equal  to two
percentage  points  (2.00%)  above the Term A Rate,  (iii) the Term Loan B shall
bear  interest  on the Daily  Balance  thereof  at a per annum rate equal to two
percentage  points  (2.00%) above the Term B Rate, and (iv) the Letter of Credit
fee provided in Section 2.6(b) shall be increased to three and one-half  percent
(3.50%) per annum  times the amount of the  undrawn  Letters of Credit that were
outstanding during the immediately preceding month.

                          (d) [Intentionally Omitted].

                           (e)  Payments.  Interest  and  Letter of Credit  fees
payable hereunder shall be due and payable, in arrears, on the first day of each
month during the term hereof.  Borrower hereby authorizes Lender, at its option,
without  prior notice to Borrower,  to charge such interest and Letter of Credit
fees,  all Lender  Expenses (as and when  incurred),  the charges,  commissions,
fees,  and  costs  provided  for in  Section  2.2(d)  (as and  when  accrued  or
incurred),  the fees  and  charges  provided  for in  Section  2.11 (as and when
accrued or incurred),  and all installments or other payments due under the Term
Loans or any Loan Document to Borrower's Loan Account,  which amounts thereafter
shall accrue interest at the rate then applicable to Advances hereunder.

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<PAGE>

                           (f)  Computation.  The Reference Rate as of  the date
of this Agreement is eight and  one-quarter  percent  (8.25%) per annum.  In the
event the Reference Rate is changed from time to time hereafter,  the applicable
rate of interest  hereunder  automatically and immediately shall be increased or
decreased by an amount equal to such change in the Reference  Rate. All interest
and fees chargeable under the Loan Documents shall be computed on the basis of a
three hundred sixty (360) day year for the actual number of days elapsed.

                           (g)  Intent to Limit Charges to Maximum  Lawful Rate.
Borrower and Lender  hereby agree and  stipulate  that the only charges  imposed
upon  Borrower for the use of money in  connection  with this  Agreement are and
shall be the specific  interest and fees  described in this Article 2 and in any
other Loan Document.  Notwithstanding the foregoing, Borrower and Lender further
agree and  stipulate  that all agency fees,  syndication  fees,  facility  fees,
underwriting fees, default charges, late charges, funding or "breakage" charges,
increased cost charges,  the Early Termination  Premium,  "float" or "clearance"
charges, attorneys' fees and reimbursement for costs and expenses paid by Lender
to third  parties or for damages  incurred  by Lender are charges to  compensate
Lender  for  underwriting  and  administrative  services  and  costs  or  losses
performed or incurred, and to be performed and incurred, by Lender in connection
with  this   Agreement  and  the  other  Loan   Documents  and  shall  under  no
circumstances  be deemed to be charges for the use of money pursuant to Official
Code of Georgia  Annotated  Sections  7-4-2 and  7-4-18.  In no event  shall the
amount of interest  and other  charges for the use of money  payable  under this
Agreement exceed the maximum amounts  permissible  under any law that a court of
competent  jurisdiction  shall,  in  a  final  determination,  deem  applicable.
Borrower and Lender, in executing and delivering this Agreement,  intend legally
to agree upon the rate or rates of  interest  and other  charges  for the use of
money and manner of payment stated within it; provided,  however, that, anything
contained herein to the contrary notwithstanding, if the amount of such interest
and other charges for the use of money or manner of payment  exceeds the maximum
amount  allowable under  applicable law, then, ipso facto as of the date of this
Agreement,  Borrower is and shall be liable only for the payment of such maximum
as allowed by law, and payment  received  from  Borrower in excess of such legal
maximum,  whenever received, shall be applied to reduce the principal balance of
the Obligations to the extent of such excess.

                           (h)   Promise to Pay. Borrower hereby promises to pay
in full to Lender the amount of all Obligations,  including the principal amount
of all  Advances,  together  with accrued  interest,  fees and other amounts due
thereon, all in accordance with the terms of this Agreement.

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<PAGE>

                  2.7      Collection of Accounts.

                           (a)  Collections. Borrower  shall,  promptly  (but in
no event  later than  December  15,  1999)  after the  Amendment  Closing  Date,
instruct all Account Debtors (other than retail customers and optometrists) with
respect to the  Accounts,  General  Intangibles  and  Negotiable  Collateral  of
Borrower and the  Restricted  Subsidiaries  to remit,  on each Business Day, all
Collections  in respect  thereof  directly to the Lockbox or to a  Concentration
Account  via  electronic  funds  transfer  (including,  but not  limited  to ACH
transfers).  From and after the Amendment Closing Date, Borrower shall cause all
Collections and other amounts received by Borrower or any Restricted  Subsidiary
at any retail  store  location  to be  deposited  on a daily basis into a Retail
Store Account or a Concentration Account. In addition,  Borrower agrees that all
other  Collections  and other  amounts  received  directly  by  Borrower  or any
Restricted  Subsidiary  from any Account Debtor or any other source  immediately
upon receipt shall be deposited  into a  Concentration  Account.  Borrower shall
cause all funds in excess of $500 on deposit in each Retail Store  Account to be
sent by electronic funds transfer (including, but not limited to, ACH transfers)
on each Business Day to a Concentration Account.

                           (b)  Lockbox   and   Concentration   Accounts.   With
respect to each Lockbox,  Borrower, Lender and the applicable Lockbox Bank shall
have entered into a Lockbox  Agreement,  which among other things shall  provide
(i) for the opening or  maintenance  of a Lockbox  Account at such  Lockbox Bank
into which all  Collections  received in such  Lockbox  shall be  deposited on a
daily basis and (ii) that all cash deposited into such Lockbox  Account shall be
sent by electronic funds transfer (including,  but not limited to ACH transfers)
on each Business Day to the Master  Concentration  Account.  With respect to the
Sub-Concentration Accounts,  Borrower, Lender and First Union shall have entered
into a Concentration  Account Agreement,  which among other things shall provide
that all cash  deposited  into each  Sub-Concentration  Account shall be sent by
electronic funds transfer (including,  but not limited to ACH transfers) on each
Business Day to the Master Concentration  Account. Upon the terms and subject to
the conditions set forth in the Concentration  Account Agreement with respect to
the  Master   Concentration   Account,   all  amounts  received  in  the  Master
Concentration  Account  shall be wired each  Business  Day into an account  (the
"Lender Account") maintained by Lender at a depository selected by Lender.

                           (c)  Retail Store Accounts. Promptly (but in no event
later than thirty (30) days) after the Amendment  Closing Date,  Borrower shall,
with  respect to each  Retail  Store  Account,  deliver  to Lender  either (i) a
Blocked  Account  Agreement  with respect to such Retail  Store  Account or (ii)
evidence  that  Borrower  has  provided to the bank at which such  Retail  Store
Account is  located  notice in writing of  Lender's  security  interest  in such
Retail  Store  Account  and  irrevocable  directions  in  writing,  in form  and
substance   satisfactory  to  Lender,  to  send  by  electronic  funds  transfer
(including,  but not  limited  to,  ACH  transfers)  on each  Business  Day to a
Concentration Account all funds in excess of $500 on deposit in such Retail

                                       37
<PAGE>

Store  Account  and that each  bank has  agreed  to do so.  Notwithstanding  the
foregoing, promptly upon the request of Lender, Borrower shall deliver a Blocked
Account Agreement to Lender with respect to any Retail Store Account  identified
by Lender (which shall include,  without  limitation,  each Retail Store Account
with Wells Fargo Bank,  National  Association).  Each Blocked Account  Agreement
shall  provide,  among other things,  that all cash in excess of $500  deposited
into the Retail Store Accounts covered thereby shall be sent by electronic funds
transfer (including, but not limited to ACH transfers) on each Business Day to a
Concentration Account.

                           (d)  Miscellaneous.     No     Lockbox     Agreement,
Concentration Account Agreement,  Blocked Account Agreement or other arrangement
contemplated in this Section 2.7 shall be modified by Borrower without the prior
written consent of Lender.

                  2.8  Crediting  Payments;   Application  of  Collections.  The
receipt of any  Collections  by Lender  (whether from transfers to Lender by the
Concentration  Account Bank pursuant to the  Concentration  Account Agreement or
otherwise)  immediately shall be applied provisionally to reduce the Obligations
in the order as determined by Lender,  in its sole discretion,  but shall not be
considered a payment on account unless such  Collection  item is a wire transfer
of  immediately  available  federal  funds and is made to the Lender  Account or
unless and until such  Collection  item is honored when  presented  for payment.
From and after the Amendment  Closing  Date,  Lender shall be entitled to charge
Borrower for two (2)  Business  Days of  `clearance'  or `float' at the rate set
forth  in  Section  2.6(a)(i),  Section  2.6(a)(ii)  or  Section  2.6(c)(i),  as
applicable,  on all  Collections  that are  received  by Lender  (regardless  of
whether  forwarded  by  the  Concentration  Account  Bank  to  Lender,   whether
provisionally   applied  to  reduce  the  Obligations   under  Section  2.1,  or
otherwise). This across-the-board two (2) Business Day clearance or float charge
on all  Collections  is  acknowledged  by the parties to  constitute an integral
aspect of the  pricing  of  Lender's  financing  of  Borrower,  and shall  apply
irrespective of the  characterization  of whether receipts are owned by Borrower
or Lender, and whether or not there are any outstanding Advances,  the effect of
such clearance or float charge being the equivalent of charging two (2) Business
Days of interest on such Collections.  Should any Collection item not be honored
when presented for payment,  then Borrower shall be deemed not to have made such
payment,  and  interest  shall  be  recalculated  accordingly.  Anything  to the
contrary contained herein  notwithstanding,  any Collection item shall be deemed
received by Lender only if it is received into the Lender  Account on a Business
Day on or before 2:00 p.m.  (Eastern  time).  If any Collection item is received
into the Lender Account on a non-Business Day or after 2:00 p.m.  (Eastern time)
on a Business  Day, it shall be deemed to have been received by Lender as of the
opening of business on the immediately  following Business Day.  Notwithstanding
the foregoing,  (i) any Collections or other amounts received by Lender prior to
the occurrence of an Event of Default that are not directed to be applied to the
Loans in any particular  order by Borrower or elsewhere in this Agreement  shall
be applied to the Obligations as Lender, in its sole discretion, shall

                                       38
<PAGE>

determine,  and (ii) any  Collections or other amounts  received by Lender after
the  occurrence  of an Event of Default shall be applied to the  Obligations  as
Lender, in its sole discretion, shall determine.

                  2.9  Designated  Account.  Lender  is  authorized  to make the
Advances,  the Letters of Credit and the Term Loans under this  Agreement  based
upon telephonic or other  instructions  received from anyone purporting to be an
Authorized  Person,  or without  instructions  if  pursuant  to Section  2.6(e).
Borrower  agrees to  establish  and  maintain  the  Designated  Account with the
Designated  Account  Bank for the  purpose  of  receiving  the  proceeds  of the
Advances  requested by Borrower and made by Lender  hereunder.  Unless otherwise
agreed by Lender and  Borrower,  any Advance  requested  by Borrower and made by
Lender hereunder shall be made to the Designated Account.

                  2.10  Maintenance of Loan Account;  Statements of Obligations.
Lender shall maintain an account on its books in the name of Borrower (the "Loan
Account") on which Borrower will be charged with all Advances and the Term Loans
made by  Lender  to  Borrower  or for  Borrower's  account,  including,  accrued
interest,  Lender Expenses,  and any other payment  Obligations of Borrower.  In
accordance with Section 2.8, the Loan Account will be credited with all payments
received  by Lender from  Borrower  or for  Borrower's  account,  including  all
amounts  received in the Lender  Account from the  Concentration  Account  Bank.
Lender shall render statements regarding the Loan Account to Borrower, including
principal,  interest,  fees,  and  including an  itemization  of all charges and
expenses  constituting  Lender  Expenses  owing,  and such  statements  shall be
conclusively  presumed  to be correct and  accurate  and  constitute  an account
stated between  Borrower and Lender unless,  within  forty-five  (45) days after
receipt thereof by Borrower,  Borrower shall deliver to Lender written objection
thereto describing the error or errors contained in any such statements.

                  2.11     Fees.

                           (a)     Fee Letter.  Borrower shall pay to Lender the
fees set forth in the Fee Letter.

                           (b)  Unused Line Fee.  On the first day of each month
during the term of this Agreement,  Borrower shall pay to Lender, in arrears, an
unused line fee in an amount equal to one-half of one percent  (0.50%) per annum
times the Average Unused Portion of the Maximum Revolving Amount.

                           (f)  Miscellaneous.   The   fees   set   forth  above
shall be fully earned when due and non-refundable  when paid and, if applicable,
computed  on the basis of a three  hundred  sixty  (360) day year for the actual
number of days elapsed.

                  2.12     Eurodollar Rate Advances. Any other provisions herein
to the contrary  notwithstanding,  the  following  provisions  shall govern with
respect to Eurodollar Rate Advances as to the matters covered:

                                       39
<PAGE>

                           (a)  Borrowing;  Conversion;  Continuation.  Borrower
may from time to time,  on or after  the  Amendment  Closing  Date,  request  in
written or  telephonic  communication  with Lender:  (i) Advances to  constitute
Eurodollar  Rate  Advances;  (ii) that Reference Rate Advances be converted into
Eurodollar  Rate  Advances;  or (iii) that  existing  Eurodollar  Rate  Advances
continue for an additional  Interest Period.  Any such request shall specify the
aggregate amount of the requested Eurodollar Rate Advances, the proposed funding
date  therefor  (which  shall be a Business  Day,  and with respect to continued
Eurodollar  Rate  Advances  shall be the last day of the Interest  Period of the
existing  Eurodollar Rate Advances being  continued),  and the proposed Interest
Period, in each case subject to the limitations set forth below. Eurodollar Rate
Advances may only be made, continued, or extended if, as of the proposed funding
date therefor each of the following conditions is satisfied:

                                    (v)   no Event of Default exists;

                                    (w)   no more than five (5) Eurodollar  Rate
Advances may be in effect at any one time;

                                    (x)   the amount  of  each  Eurodollar  Rate
Advance  borrowed,  converted,  or continued  must be in an amount not less than
$1,000,000 and integral multiples of $500,000 in excess thereof;

                                    (y)   Lender  shall have determined that the
Adjusted Eurodollar Rate is available to Lender and can be readily determined as
of the date of the request for such Eurodollar Rate Advance by Borrower; and

                                    (z) Lender shall have  received such request
at least three (3) Business Days prior to the proposed funding date therefor.

Any request by Borrower to borrow Eurodollar Rate Advances, to convert Reference
Rate  Advances  to  Eurodollar  Rate  Advances,  or  to  continue  any  existing
Eurodollar Rate Advances shall be irrevocable,  except to the extent that Lender
shall determine under Sections  2.12(a),  2.13 or 2.14 that such Eurodollar Rate
Advances cannot be made or continued.

                  (b) Determination of Interest Period. Eurodollar Rate Advances
shall  only  be  available  for  Interest  Periods  of  ninety  (90)  days.  The
determination of Interest Periods shall be subject to the following provisions:

                           (i)   in the case of immediately successive  Interest
Periods,  each successive Interest Period shall commence on the day on which the
next preceding Interest Period expires;

                           (ii)  if any   Interest Period would otherwise expire
on a day which is not a Business  Day, the Interest  Period shall be extended to
expire on the next succeeding Business Day; provided,  however, that if the next
succeeding Business Day occurs in the following calendar month, then such

                                       40
<PAGE>

Interest  Period shall end on the last Business Day of the calendar month at the
end of such Interest Period;

                           (iii) if  any  Interest  Period  begins  on the  last
Business  Day  of a  month  or on a  day  for  which  there  is  no  numerically
corresponding day in the calendar month at the end of such Interest Period, then
the Interest  Period shall end on the last Business Day of the calendar month at
the end of such Interest Period; and

                           (iv)  Borrower  may not  request  a  Eurodollar  Rate
Advance with an Interest Period which expires later than the applicable  Renewal
Date.

                  (c) Automatic  Conversion;  Optional Conversion by Lender. Any
Eurodollar Rate Advance shall automatically  convert to a Reference Rate Advance
upon (x) the  occurrence  of any  Event of  Default,  or (y) the last day of the
applicable  Interest  Period,  unless  Lender has received a request to continue
such  Eurodollar  Rate Advance at least three (3) Business Days prior to the end
of such Interest  Period in accordance  with the terms of Section 2.12 (a) . Any
Eurodollar  Rate Advance  shall,  at Lender's  option,  upon notice to Borrower,
convert to a  Reference  Rate  Advance in the event that (i) an Event of Default
shall have occurred and be continuing as of the last day of the Interest  Period
for such Eurodollar Rate Advance,  or (ii) this Agreement shall  terminate,  and
Borrower  shall pay to Lender any amounts  required by Section  2.15 as a result
thereof.

                  2.13  Illegality.  Any other provision  herein to the contrary
notwithstanding,  if the adoption of or any change in any  Requirement of Law or
in the  interpretation or application  thereof shall make it unlawful for Lender
to make or maintain  Eurodollar Rate Advances as contemplated by this Agreement,
(a) the  obligation  of  Lender  hereunder  to make  Eurodollar  Rate  Advances,
continue  Eurodollar Rate Advances as such, and convert  Reference Rate Advances
to Eurodollar  Rate Advances shall  forthwith be suspended and (b) Lender's then
outstanding  Eurodollar Rate Advances, if any, shall be converted  automatically
to  Reference  Rate  Advances on the  respective  last days of the then  current
Interest  Periods with respect thereto or within such earlier period as required
by law; provided,  however, that before making any such demand, Lender agrees to
use  reasonable  efforts  (consistent  with its  internal  policy  and legal and
regulatory restrictions and so long as such efforts would not be disadvantageous
to it, in its  reasonable  discretion,  in any legal,  economic,  or  regulatory
manner)  to  designate  a  different  lending  office  if the  making  of such a
designation  would allow Lender or its lending office to continue to perform its
obligations  to make  Eurodollar  Rate  Advances.  If any such  conversion  of a
Eurodollar  Rate  Advance  occurs on a day which is not the last day of the then
current Interest Period with respect thereto,  Borrower shall pay to Lender such
amounts,  if any, as may be required  pursuant to Section 2.15. If circumstances
subsequently  change  so that  Lender  shall  determine  that it is no longer so
affected, Lender will promptly notify Borrower, and upon receipt of such notice,
the  obligations  of Lender to make or continue  Eurodollar  Rate Advances or to
convert   Reference  Rate  Advances  into  Eurodollar  Rate  Advances  shall  be
reinstated.

                                       41
<PAGE>

                  2.14 Requirements of Law. (a) If the adoption of or any change
in any  Requirement of Law or in the  interpretation  or application  thereof or
compliance  by Lender with any request or  directive  (whether or not having the
force  of law)  from  any  central  bank or other  Governmental  Authority  made
subsequent to the date hereof:

                  (i)  shall  subject  Lender  to any tax,  levy,  charge,  fee,
         reduction,  or withholding of any kind  whatsoever with respect to this
         Agreement or any  Advance,  or change the basis of taxation of payments
         to Lender in respect  thereof  (except for the  establishment  of a tax
         based on the net  income of Lender or changes in the rate of tax on the
         net income of Lender);

                  (ii) shall  impose,  modify or hold  applicable  any  reserve,
         special deposit, compulsory loan, or similar requirement against assets
         held  by,  deposits  or other  liabilities  in or for the  account  of,
         Eurodollar Rate Advances or other extensions of credit by, or any other
         acquisition of funds by, any office of Lender; or

                  (iii) shall impose on Lender any other  condition with respect
         to this Agreement or any Eurodollar Rate Advance;

and the  result of any of the  foregoing  is to  increase  the cost to Lender of
making,  converting into, continuing, or maintaining Eurodollar Rate Advances or
to reduce any amount  receivable  hereunder in respect of such  Advances,  or to
forego any other sum payable  thereunder or make any payment on account thereof,
then, in any such case, Borrower shall promptly pay Lender, upon its demand, any
additional  amounts  necessary to compensate  Lender for such  increased cost or
reduced  amount  receivable;  provided,  however,  that  before  making any such
demand,  Lender agrees to use reasonable  efforts  (consistent with its internal
policy and legal and regulatory  restrictions  and so long as such efforts would
not be  disadvantageous  to it,  in its  reasonable  discretion,  in any  legal,
economic,  or  regulatory  manner) to designate a different  Eurodollar  lending
office if the making of such  designation  would allow Lender or its  Eurodollar
lending office to continue to perform its  obligations to make  Eurodollar  Rate
Advances or to continue to fund or maintain  Eurodollar  Rate Advances and avoid
the need for, or materially reduce the amount of, such increased cost. If Lender
becomes entitled to claim any additional  amounts pursuant to this Section 2.14,
Lender  shall  notify  Borrower of the event by reason of which it has become so
entitled.  A certificate as to any additional  amounts payable  pursuant to this
Section 2.14  submitted by Lender to Borrower shall be conclusive in the absence
of manifest  error. If Borrower so notifies Lender within five (5) Business Days
after Lender  notifies  Borrower of any increased cost pursuant to the foregoing
provisions of this Section 2.14 and reimburses Lender for any cost in accordance
with Section  2.15.,  Borrower may convert all  Eurodollar  Rate  Advances  then
outstanding  into Reference Rate Advances in accordance  with Section 2.12. This
covenant shall survive the  termination of this Agreement and the payment of the
Obligations.

                                       42
<PAGE>

                  (b) If Lender  shall have  determined  that the adoption of or
any  change in any  Requirement  of Law  regarding  capital  adequacy  or in the
interpretation  or  application  thereof or  compliance  by Lender or any Person
controlling  Lender with any request or  directive  regarding  capital  adequacy
(whether or not having the force of law) from any  Governmental  Authority  made
subsequent  to the date hereof does or shall have the effect of  increasing  the
amount of capital  required to be  maintained  or reducing the rate of return on
Lender's or such Person's capital as a consequence of its obligations  hereunder
to a level below that which such Lender or such Person  could have  achieved but
for such  change or  compliance  (taking  into  consideration  Lender's  or such
Person's  policies  with  respect to capital  adequacy)  by an amount  deemed by
Lender to be material,  then from time to time,  after  submission  by Lender to
Borrower of a prompt written request therefor, Borrower shall pay to Lender such
additional  amount or amounts as will compensate  Lender or such Person for such
reduction. This covenant shall survive the termination of this Agreement and the
payment of the Obligations.

                  2.15  Indemnity.  Borrower  agrees to indemnify  Lender and to
hold Lender  harmless from any loss or expense which Lender may sustain or incur
as a  consequence  of (a) a  default  by  Borrower  in  payment  when due of the
principal amount of or interest on any Eurodollar Rate Advance, (b) a default by
Borrower  in  making  a  borrowing  of,  conversion  into,  or  continuation  of
Eurodollar  Rate Advances after Borrower has given a notice  requesting the same
in accordance with the provisions of this  Agreement,  (c) a default by Borrower
in making any prepayment of any Eurodollar Rate Advance after Borrower has given
a notice thereof in accordance with the provisions of this Agreement, or (d) the
making of a prepayment  of  Eurodollar  Rate  Advances on a day which is not the
last  day  of an  Interest  Period  with  respect  thereto  (whether  due to the
termination of this Agreement upon an Event of Default or otherwise), including,
in each case, any such loss or expenses  arising from the  reemployment of funds
obtained by it or from fees  payable to terminate  the deposits  from which such
funds were  obtained.  Calculation  of all amounts  payable to Lender under this
Section  2.15 shall be made as though  Lender had  actually  funded the relevant
Eurodollar Rate Advance  through the purchase of a deposit  bearing  interest at
the  Eurodollar  Rate in an amount equal to the amount of such  Eurodollar  Rate
Advance  and having a  maturity  comparable  to the  relevant  Interest  Period;
provided,  however, that Lender may fund each of the Eurodollar Rate Advances in
a manner it sees fit, and the  foregoing  assumption  shall be utilized only for
the  calculation of amounts payable under this Section 2.15. This covenant shall
survive the termination of this Agreement and the payment of the Obligations.

         3.       CONDITIONS; TERM OF AGREEMENT.

                  3.1  Conditions  Precedent to the Initial  Advance,  Letter of
Credit and the Term Loans. The obligation of Lender to make the initial Advance,
to issue the  initial  Letter of Credit or to make the Term  Loans is subject to
the fulfillment,  to the satisfaction of Lender and its counsel,  of each of the
following conditions on or before the Amendment Closing Date:

                                       43
<PAGE>

                           (a)     the Amendment Closing Date shall occur on  or
before November 30, 1999;

                           (b)     Lender    shall    have   received   searches
reflecting the filing of Uniform Commercial Code assignments with respect to the
financing statements and fixture filings set forth on Schedule 3.1;

                           (c)     Lender  shall  have  received  each  of   the
following  documents,  duly  executed,  and each such document  shall be in full
force and effect:

                                    a.     the Lockbox Agreements;

                                    b.     the Concentration Account Agreements;

                                    c.     the Disbursement Letter;

                                    d.     the Security Agreement;

                                    e.     the Pledge Agreement;

                                    f.     the Assignment of Notes;

                                    g.     the Subsidiary Guaranty;

                                    h.     the Subsidiary Security Agreement;

                                    i.     the Subsidiary Pledge Agreement; and

                                    j.     the Assignment of LLC Interests;

                           (d)      Lender  shall  have  received a  certificate
from the Secretary of Borrower and each Restricted  Subsidiary  attesting to the
resolutions of the Board of Directors of Borrower or such Restricted Subsidiary,
as the case may be, authorizing its execution, delivery, and performance of this
Agreement  and the other Loan  Documents  to which  Borrower or such  Restricted
Subsidiary,  as  applicable,  is a party and  authorizing  specific  officers of
Borrower to execute the same;

                           (e)      Lender shal  have  received  copies  of  the
Governing  Documents of Borrower  and each  Restricted  Subsidiary,  as amended,
modified,  or  supplemented  to the  Amendment  Closing  Date,  certified by the
Secretary of Borrower or such Restricted Subsidiary, as applicable;

                           (f)      Lender shall  have  received  a  certificate
of status with respect to Borrower and each Restricted Subsidiary,  dated within
twenty (20) days of the Amendment Closing Date, such certificate to be issued by
the appropriate  officer of the jurisdiction of organization of Borrower or such
Restricted  Subsidiary,  as applicable,  which  certificate  shall indicate that
Borrower or such Restricted  Subsidiary,  as applicable,  is in good standing in
such jurisdiction;

                                       44
<PAGE>

                           (g)      Lender  shall  have   received  certificates
of status with respect to Borrower and each  Restricted  Subsidiary,  each dated
within twenty (20) days of the Amendment  Closing Date, such  certificates to be
issued by the appropriate officer of the jurisdictions in which Borrower or such
Restricted Subsidiary, as applicable, is required to be qualified to do business
as a foreign  corporation (except where the failure to be so qualified could not
reasonably be expected to have a Material  Adverse Effect),  which  certificates
shall indicate that Borrower or such Restricted Subsidiary, as applicable, is in
good standing in such jurisdictions;

                           (h)      Lender shall have received a certificate  of
insurance,  together with the endorsements  thereto,  as are required by Section
6.6,  the form and  substance of which shall be  satisfactory  to Lender and its
counsel;

                           (i)      Lender  shall  have  received  duly executed
certificates  of title with  respect to that portion of the  Collateral  that is
subject to certificates of title;

                           (j)      Lender   shall   have   received    evidence
satisfactory  to it that,  immediately  after the funding of the  initial  loans
under this  Agreement,  the interest  payment default with respect to the Senior
Notes shall be cured;

                           (k)      Lender  shall  have  received  an opinion of
Kilpatrick Stockton LLP, counsel to Borrower and its Restricted  Subsidiary,  in
form and substance satisfactory to Lender in its sole discretion;

                           (l)      Lender  shall   have  received  satisfactory
reference, credit and background checks on key management of Borrower;

                           (m)      Lender  shall  have  received the results of
lien  searches  against  Borrower  and  its  Subsidiaries  from  all  applicable
jurisdictions,  which shall  evidence that there are no Liens of record  against
Borrower or any of its Subsidiaries, other than Permitted Liens;

                           (n)      Lender  shall  have   received  satisfactory
evidence that all tax returns  required to be filed by Borrower have been timely
filed and all taxes  upon  Borrower  and its  Subsidiaries  or their  respective
properties,  assets,  income, and franchises  (including real property taxes and
payroll taxes) have been paid prior to  delinquency,  except such taxes that are
the subject of a Permitted Protest;

                           (o)      Lender   shall   have    received   evidence
satisfactory  to it that,  after  making the initial  Advance  hereunder  on the
Amendment  Closing Date,  Borrower shall have on the Amendment Closing Date cash
on hand or Excess Availability in an amount equal to or greater than $3,000,000;
and

                           (p)      all  other  documents  and  legal matters in
connection with the transactions  contemplated by this Agreement shall have been
delivered, executed, or recorded and shall be in form and substance satisfactory
to Lender and its counsel.

                                       45
<PAGE>

                  3.2  Conditions  Precedent  to all  Advances,  all  Letters of
Credit and the Term Loans.  The following  shall be conditions  precedent to all
Advances, all Letters of Credit and the Term Loans hereunder:

                           (a)      the representations and warranties contained
in this Agreement and the other Loan Documents  shall be true and correct in all
respects on and as of the date of such  extension  of credit,  as though made on
and as of  such  date  (except  to the  extent  that  such  representations  and
warranties relate solely to an earlier date);

                           (b)      no Default  or  Event  of Default shall have
occurred and be  continuing on the date of such  extension of credit,  nor shall
either result from the making thereof; and

                           (c)      no injunction, writ, restraining  order,  or
other order of any nature prohibiting,  directly or indirectly, the extending of
such  credit  shall have been  issued  and  remain in force by any  Governmental
Authority against Borrower, Lender, or any of their Affiliates.

                  3.3 Condition Subsequent. As a condition subsequent to initial
closing hereunder, Borrower shall perform or cause to be performed the following
(the failure by Borrower to so perform or cause to be performed  constituting an
Event of Default):

                           (a)      Within   ninety  (90) days of the  Amendment
Closing  Date,  Borrower  shall  deliver to Lender the  certified  copies of the
policies of insurance, as are required by Section 6.6, the form and substance of
which shall be satisfactory to Lender and its counsel;  provided,  however, that
copies of all endorsements to such insurance  policies shall be delivered within
thirty (30) days after the Amendment Closing Date.

                           (b)      Within thirty (30) days after the  Amendment
Closing Date,  Borrower shall deliver to Lender evidence  satisfactory to Lender
that all defaults and events of default under the Lease Agreement dated April 6,
1997, between Frame-N-Lens  Optical,  Inc. and Banc One Leasing Corporation have
been cured.

                           (c)      Within thirty (30) days after the  Amendment
Closing  Date,  Lender  shall  have (i)  received  appraisals  of the  Inventory
satisfactory  to Lender and (ii)  completed a field  examination or audit of the
assets of Borrower and its  Subsidiaries  and an inspection of each warehouse or
distribution  center  storing any  Inventory,  and the results  thereof shall be
acceptable to Lender in its sole discretion.

                           (d)      On  or  before May 31, 2000,  Borrower shall
deliver  to  Lender  evidence  satisfactory  to  Lender  that  Borrower  and its
Subsidiaries have completed the  implementation of a new automated point of sale
system.

                                       46
<PAGE>

                           (e)      Within   sixty (60) days  of  the  Amendment
Closing Date, Lender shall have received a complete business valuation appraisal
from  Ernst & Young of  Borrower  and its  Subsidiaries,  in form and  substance
satisfactory to Lender.

                           (f)      Within  thirty  (30)  days  of the Amendment
Closing Date,  Borrower shall deliver to Lender Blocked Account  Agreements with
respect to the Retail Store Accounts at Wells Fargo Bank, National Association.

                           (g)      On  or  before  December 31, 1999,  Borrower
shall deliver to Lender evidence that (i) Borrower and each of its  Subsidiaries
is duly  qualified as a foreign  corporation  or limited  liability  and in good
standing under the laws of each  jurisdiction  where their  ownership,  lease or
operation of property or conduct of their business requires such  qualification,
and (ii) Borrower has filed in each  jurisdiction in which it is qualified to do
business an amendment to its  qualification  to the effect that  Borrower's name
has changed from "National Vision Associates,  Ltd." to "Vista Eyecare, Inc." to
the extent that Borrower is permitted to use such name in such jurisdiction.

                           (h)      Within  five  (5) days  of   the   Amendment
Closing Date,  Lender shall have  received an  assignment,  in recordable  form,
assigning the Administrative Agent's rights and obligations under the Collateral
Assignment of Deed of Trust to Lender.

                           (i)      On  or  before  December 31, 1999,  Borrower
will provide a reconciliation  between the October month end perpetual inventory
and the October month end general ledger.

                  3.4 Term.  This  Agreement  shall  become  effective  upon the
execution and delivery  hereof by Borrower and Lender and shall continue in full
force and  effect for a term  ending May 31,  2002 (the  "Maturity  Date").  The
foregoing  notwithstanding,  Lender  shall  have  the  right  to  terminate  its
obligations  under  this  Agreement  immediately  and  without  notice  upon the
occurrence and during the continuation of an Event of Default.

                  3.5 Effect of Termination.  On the date of termination of this
Agreement,  all Obligations (including contingent  reimbursement  obligations of
Borrower with respect to any outstanding  Letters of Credit)  immediately  shall
become  due and  payable  without  notice  or  demand.  No  termination  of this
Agreement,  however,  shall relieve or discharge  Borrower of Borrower's duties,
Obligations,  or covenants hereunder, and Lender's continuing security interests
in the Collateral  shall remain in effect until all Obligations  have been fully
and finally  discharged  and Lender's  obligation to provide  additional  credit
hereunder is terminated.

                                       47
<PAGE>

                  3.6 Early  Termination by Borrower.  The provisions of Section
3.4 that allow  termination  of this  Agreement by Borrower only on the Maturity
Date (but not any extension thereof),  Borrower has the option, at any time upon
ninety (90) days' prior written notice to Lender, to terminate this Agreement by
paying to Lender,  in cash,  the  Obligations  (including an amount equal to one
hundred five percent (105%) of the undrawn amount of the Letters of Credit),  in
full,  together with a premium (the "Early  Termination  Premium")  equal to one
percent (1.00%) of the Maximum Revolving Amount as determined  immediately prior
to termination.

                  3.7 Termination  Upon Event of Default.  If Lender  terminates
this Agreement  prior to the Maturity Date (but not any extension  thereof) upon
the  occurrence  of an Event of  Default,  in view of the  impracticability  and
extreme difficulty of ascertaining actual damages and by mutual agreement of the
parties as to a  reasonable  calculation  of Lender's  lost  profits as a result
thereof,  Borrower  shall  pay  to  Lender  upon  the  effective  date  of  such
termination,  a premium  in an amount  equal to the Early  Termination  Premium;
provided,  however,  that if this Agreement is terminated upon the occurrence of
an Event of Default  which has not been wilfully  caused by Borrower,  the Early
Termination  Premium  shall  be  reduced  by  fifty  percent  (50%).  The  Early
Termination  Premium shall be presumed to be the amount of damages  sustained by
Lender as the result of the early  termination  and  Borrower  agrees that it is
reasonable under the  circumstances  currently  existing.  The Early Termination
Premium  provided  for in this  Section  3.7  shall be  deemed  included  in the
Obligations.

         4.       [Intentionally Omitted]

         5.       REPRESENTATIONS AND WARRANTIES.

                  In order  to  induce  Lender  to enter  into  this  Agreement,
Borrower makes the following representations and warranties which shall be true,
correct,  and complete in all respects as of the date hereof, and shall be true,
correct,  and complete in all respects as of the Amendment  Closing Date, and at
and as of the date of the making of each Advance,  Letter of Credit or Term Loan
made thereafter, as though made on and as of the date of such Advance, Letter of
Credit  or Term  Loan  (except  to the  extent  that  such  representations  and
warranties  relate  solely  to an  earlier  date) and such  representations  and
warranties shall survive the execution and delivery of this Agreement:

                  5.1      Corporate Existence and Power.  Borrower and  each of
its Subsidiaries:

                           (a)     is a corporation or limited liability company
duly  organized,  validly  existing and in good  standing  under the laws of the
jurisdiction of its incorporation or organization;

                           (b)     has   the  power  and   authority   and   all
governmental licenses, authorizations, consents and approvals to own its assets,
carry on its business and, as applicable,  to execute,  deliver, and perform its
obligations under the Loan Documents;

                                       48
<PAGE>

                           (c)     is duly  qualified  as a foreign  corporation
or limited liability company and is licensed and in good standing under the laws
of each jurisdiction where its ownership,  lease or operation of property or the
conduct of its business  requires  such  qualification  or license and where the
failure to be so qualified or licensed  could  reasonably  be expected to have a
Material Adverse Effect; and

                           (d)     is  in  compliance  in  all material respects
with all Requirements of Law;

                  5.2 Corporate Authorization; No Contravention.  The execution,
delivery and  performance  by Borrower and its Restricted  Subsidiaries  of this
Agreement and each other Loan Document to which such Person is party,  have been
duly authorized by all necessary corporate action, and do not and will not:

                           (a)     contravene  the terms of any of that Person's
Governing Documents;

                           (b)     conflict  with  or  result  in  any breach or
contravention of, or the creation of any Lien under, any document evidencing any
Contractual Obligation to which such Person is a party or any order, injunction,
writ or  decree  of any  Governmental  Authority  to which  such  Person  or its
property is subject; or

                           (c)     violate any Requirement of Law.

                  5.3   Governmental   Authorization.   No  approval,   consent,
exemption,  authorization, or other action by, or notice to, or filing with, any
Governmental  Authority (except for recordings or filings in connection with the
Liens granted to Lender under the Collateral Documents) is necessary or required
in connection  with the execution,  delivery or  performance  by, or enforcement
against,  Borrower or any of its Restricted Subsidiaries of the Agreement or any
other Loan Document.

                  5.4  Binding  Effect.  This  Agreement  and  each  other  Loan
Document to which  Borrower  or any of its  Restricted  Subsidiaries  is a party
constitute the legal,  valid and binding  obligations of Borrower and any of its
Restricted Subsidiaries to the extent it is a party thereto, enforceable against
such Person in accordance with their respective terms,  except as enforceability
may be limited by applicable bankruptcy,  insolvency,  or similar laws affecting
the  enforcement  of  creditors'  rights  generally or by  equitable  principles
relating to enforceability.

                  5.5 Litigation.  Except as specifically  disclosed in Schedule
5.5, there are no actions, suits, proceedings, claims or disputes pending, or to
the best knowledge of Borrower,  threatened or contemplated,  at law, in equity,
in arbitration or before any  Governmental  Authority,  against  Borrower or its
Subsidiaries or any of their respective properties.  None of the items disclosed
on Schedule 5.5:

                                       49
<PAGE>

                           (a)     purport  to  affect  this  Agreement  or  any
other Loan Document, or any of the transactions  contemplated hereby or thereby;
or

                           (b)     if determined adversely to Borrower or any of
its  Subsidiaries,  could  reasonably  be  expected  to have a Material  Adverse
Effect.

No injunction,  writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain the  execution,  delivery or performance of this Agreement or any other
Loan Document, or directing that the transactions provided for herein or therein
not be consummated as herein or therein provided.

                  5.6 No Default. No Default or Event of Default exists or would
result from the  incurring of any  Obligations  by Borrower or from the grant or
perfection  of the Liens of Lender on the  Collateral.  Except for the  Existing
Defaults,  as of the  Amendment  Closing Date,  neither  Borrower nor any of its
Subsidiaries is in default under or with respect to any  Contractual  Obligation
(other than any agreement relating to the lease of real property) in any respect
which,  individually  or together with all such  defaults,  could  reasonably be
expected to have a Material  Adverse Effect,  or that would, if such default had
occurred  after the  Amendment  Closing  Date,  create an Event of Default under
Section 8.5. Except for the Existing  Defaults,  neither Borrower nor any of its
Subsidiaries  is in default under or with respect to any  agreement  relating to
the lease of real  property,  which  default,  with  respect to any such  lease,
individually or together with all such defaults, could reasonably be expected to
have a Material  Adverse  Effect,  or that would,  if such  default had occurred
after the Amendment  Closing Date, create an Event of Default under Section 8.5.
As of the Amendment Closing Date, Borrower and its Restricted  Subsidiaries have
made all lease payments required to be made under all agreements relating to the
lease of real property.  As of the Amendment  Closing Date, no material  default
exists with respect to any of the leases described in Section 5.22.

                  5.7      ERISA Compliance.

                           (a)      Each  Plan  is in compliance in all material
respects with the applicable  provisions of ERISA,  the IRC and other federal or
state law. Each Plan which is intended to qualify  under  Section  401(a) of the
IRC has received a favorable  determination letter from the IRS and, to the best
knowledge of Borrower,  nothing has occurred  which would cause the loss of such
qualification.   Borrower  and  each  ERISA  Affiliate  has  made  all  required
contributions  to any Plan subject to Section 412 of the IRC, and no application
for a funding  waiver or an extension  of any  amortization  period  pursuant to
Section 412 of the IRC has been made with respect to any Plan;

                           (b)      There  are  no  pending  or,  to   the  best
knowledge of Borrower,  threatened claims, actions or lawsuits, or action by any
Governmental  Authority,  with  respect to any Plan which has  resulted or could
reasonably be expected to result in a Material Adverse Effect. There has been no

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<PAGE>

prohibited  transaction or violation of the fiduciary  responsibility rules with
respect to any Plan which has resulted or could reasonably be expected to result
in a Material Adverse Effect; and

                           (c)      (i)  No  ERISA  Event  has  occurred  or  is
reasonably  expected to occur;  (ii) no Pension  Plan has any  Unfunded  Pension
Liability;  (iii) neither  Borrower nor any ERISA  Affiliate  has  incurred,  or
reasonably  expects to incur, any liability under Title IV of ERISA with respect
to any Pension Plan (other than  premiums due and not  delinquent  under Section
4007 of ERISA);  (iv) neither Borrower nor any ERISA Affiliate has incurred,  or
reasonably  expects to incur,  any liability  (and no event has occurred  which,
with the giving of notice  under  Section  4219 of ERISA,  would  result in such
liability)  under Section 4201 or 4243 of ERISA with respect to a  Multiemployer
Plan;  and (v)  neither  Borrower  nor any  ERISA  Affiliate  has  engaged  in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA,  which in
the case of any occurrence described in any of clauses (i) through (v) above has
resulted in or could reasonably be expected to result in a liability of Borrower
and its Subsidiaries in excess of $250,000.

                  5.8 Use of Proceeds;  Margin Regulations.  The proceeds of the
Loans are to be used  solely  for the  purposes  set forth in and  permitted  by
Section 6.12 and Section 7.7.  Neither  Borrower nor any Subsidiary is generally
engaged in the  business of  purchasing  or selling  Margin  Stock or  extending
credit for the purpose of purchasing or carrying Margin Stock.

                  5.9 Title to Properties. Each of Borrower and its Subsidiaries
has good  record  and  marketable  title in fee  simple  to, or valid  leasehold
interests in, all real property necessary or used in the ordinary conduct of its
businesses, except for such defects in title as could not reasonably be expected
to have a  Material  Adverse  Effect.  As of the  Amendment  Closing  Date,  the
property of Borrower  and its  Restricted  Subsidiaries  is subject to no Liens,
other than Permitted Liens.

                  5.10 Taxes.  Each of Borrower and its  Subsidiaries  has filed
all Federal and other material tax returns and reports required to be filed, and
has paid all  Federal  and other  material  taxes,  assessments,  fees and other
governmental  charges  levied or imposed  upon it or its  properties,  income or
assets otherwise due and payable,  except those which are subject to a Permitted
Protest. There is no material proposed tax assessment against Borrower or any of
its  Subsidiaries.  The  amounts and types of all  estimated  accrued and unpaid
taxes (including,  without  limitation,  any sales or ad valorem taxes) owing by
Borrower or any of its  Subsidiaries  is set forth,  as of October 31, 1999,  on
Schedule 5.10.

                  5.11     Financial Condition.

                           (a)     The audited consolidated financial statements
of  Borrower  and its  Subsidiaries  dated  January  2,  1999,  and the  related
consolidated  statements of income or operations,  shareholders' equity and cash
flows for the fiscal  year ended on that date,  and the  unaudited  consolidated
financial  statements of Borrower and its  Subsidiaries  dated July 3, 1999, and
the  related  consolidated  statements  of income or  operations,  shareholder's
equity and cash flows for the fiscal quarter ended on that date:

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<PAGE>

                                    (i)    were prepared in accordance with GAAP
          consistently applied throughout the period covered thereby,  except as
          otherwise  expressly noted therein,  and, in the case of the quarterly
          statements  dated July 3, 1999,  subject to ordinary,  good faith year
          end audit adjustments;

                                    (ii) fairly present the financial  condition
          of Borrower and its Subsidiaries as of the date thereof and results of
          operations for the period covered thereby; and

                                    (iii)  except as  specifically  disclosed in
          Schedule 5.11, show all material  indebtedness and other  liabilities,
          direct or contingent, of Borrower and its consolidated Subsidiaries as
          of  the  date  thereof,  including  liabilities  for  taxes,  material
          commitments and Contingent Obligations.

                           (b)      Since January 2, 1999, there has occurred no
event which has had a Material Adverse Effect.

                           (c)      Borrower's  and  its   Subsidiaries'  fiscal
year end is a 52/53 week retail calendar year ending on the Saturday  closest to
December  31st (except that  certain of the Managed  Care  Subsidiaries  and the
Foreign Subsidiaries may have a calendar year end).

                  5.12     Environmental Matters.

                           (a)      Except as specifically disclosed in Schedule
5.12, the on-going operations of Borrower and each of its Subsidiaries comply in
all respects with all Environmental Laws, except such non-compliance which would
not (if  enforced in  accordance  with  applicable  law) result in  liability in
excess of $250,000 in the aggregate.

                           (b)      Except as specifically disclosed in Schedule
5.12, Borrower and each of its Subsidiaries have obtained all material licenses,
permits,  authorizations and registrations  required under any Environmental Law
("Environmental  Permits") and necessary for their  respective  ordinary  course
operations,  all such Environmental  Permits are in good standing,  and Borrower
and each of its  Subsidiaries  are in  compliance  with all  material  terms and
conditions of such Environmental Permits.

                           (c)      Except as specifically disclosed in Schedule
5.12,  none of  Borrower,  any of its  Subsidiaries  or any of their  respective
present property or operations, is subject to any outstanding written order from
or agreement  with any  Governmental  Authority,  nor subject to any judicial or
docketed   administrative   proceeding,   respecting  any   Environmental   Law,
Environmental Claim or Hazardous Material, which would reasonably be expected to
give rise to Environmental  Claims with potential  liability of Borrower and its
Subsidiaries in excess of $250,000 in the aggregate.

                                       52
<PAGE>

                           (d)  Except as  specifically  disclosed  in  Schedule
5.12,  there are no Hazardous  Materials or other  conditions  or  circumstances
existing with respect to any property of Borrower or any of its Subsidiaries, or
arising from operations prior to the Amendment  Closing Date, of Borrower or any
of  its  Subsidiaries  that  would  reasonably  be  expected  to  give  rise  to
Environmental Claims with a potential liability of Borrower and its Subsidiaries
in excess of $250,000 in the aggregate for any such  condition,  circumstance or
property. In addition,  (i) neither Borrower nor any of its Subsidiaries has any
underground  storage  tanks (x) that are not  properly  registered  or permitted
under  applicable  Environmental  Laws,  or (y) that are leaking or disposing of
Hazardous Materials off-site,  and which in the case of any occurrence described
in clause (x) or (y) could  reasonably  be expected to give rise to  Environment
Claims with potential  liability of Borrower and its  Subsidiaries  in excess of
$250,000 in the aggregate,  and (ii) Borrower and its Subsidiaries have notified
all of their respective employees of the existence, if any, of any health hazard
arising from the conditions of their  employment  and have met all  notification
requirements under Title III of CERCLA and all other Environmental Laws.

                  5.13     Collateral Documents.

                           (a)      The  provisions  of each of  the  Collateral
Documents are  effective to create in favor of Lender,  acting on its own behalf
and for its own benefit,  a legal, valid and enforceable first priority security
interest in all right,  title and interest of Borrower and its  Subsidiaries  in
the Collateral described therein,  subject to Permitted Liens, if any, which are
not  subordinated  to the Liens under the  Collateral  Documents;  and financing
statements have been filed in the offices in all of the jurisdictions  listed in
the schedule to the Security  Agreement and the Subsidiary  Security  Agreement.
Each of the applicable patent security agreements, trademark security agreements
and copyright  security  agreements  attached to the Security  Agreement and the
Subsidiary  Security Agreement as Exhibits has been filed in the U.S. Patent and
Trademark Office and the U.S. Copyright Office.

                           (b)      All   representations  and   warranties   of
Borrower and each of its Restricted  Subsidiaries party thereto contained in the
Collateral Documents are true and correct.

                  5.14  Regulated  Entities.   None  of  Borrower,   any  Person
controlling  Borrower, or any Subsidiary of Borrower, is an "Investment Company"
within the  meaning  of the  Investment  Company  Act of 1940.  Borrower  is not
subject to regulation  under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act, any state public utilities code,
or any other  Federal or state  statute or  regulation  limiting  its ability to
incur Indebtedness.

                  5.15 No Burdensome  Restrictions.  Neither Borrower nor any of
its  Subsidiaries  is a party  to or  bound by any  Contractual  Obligation,  or
subject to any restriction in any Governing Document, or any Requirement of Law,
which could reasonably be expected to have a Material Adverse Effect.

                                       53
<PAGE>

                  5.16 Copyrights,  Patents,  Trademarks and Licenses, Etc. Each
of Borrower and its Subsidiaries own or are licensed or otherwise have the right
to use all of the material  patents,  trademarks,  service  marks,  trade names,
copyrights,  contractual  franchises,  authorizations  and other rights that are
reasonably necessary for the operation of their respective  businesses,  without
conflict with the rights of any other Person. To the best knowledge of Borrower,
no slogan or other advertising device, product, process, method, substance, part
or other material now employed,  or now contemplated to be employed, by Borrower
or any of its  Subsidiaries  infringes  upon any rights held by any other Person
which could  reasonably  be expected to result in a claim by any other Person in
excess of $250,000.  Except as specifically  disclosed in Schedule 5.5, no claim
or litigation  regarding any of the foregoing is pending or  threatened,  and no
patent,  invention,  device,  application,  principle or any statute, law, rule,
regulation,  standard  or code is  pending  or, to the  knowledge  of  Borrower,
proposed.

                  5.17  Subsidiaries.  Borrower has no  Subsidiaries  other than
those specifically disclosed in part (a) of Schedule 5.17 hereto (which Schedule
designates whether each Subsidiary is a Restricted Subsidiary or an Unrestricted
Subsidiary as of the Amendment  Closing Date) and has no equity  investments  in
any other corporation or entity other than those specifically  disclosed in part
(b) of Schedule 5.17.

                  5.18 Insurance.  Except as specifically  disclosed in Schedule
5.18,  the  properties  of  Borrower  and  its  Subsidiaries  are  insured  with
financially sound and reputable  insurance companies which are not Affiliates of
Borrower,  in such amounts, with such deductibles and covering such risks as are
customarily  carried  by  companies  engaged in  similar  businesses  and owning
similar properties in localities where Borrower or such Subsidiary operates.

                  5.19  Solvency.  Borrower and  eac   of  its  Subsidiaries are
Solvent.

                  5.20  Full  Disclosure.   None  of  the   representations   or
warranties  made by Borrower or any Restricted  Subsidiary in the Loan Documents
as of the date such  representations and warranties are made or deemed made, and
none  of  the  statements  contained  in  any  exhibit,   report,  statement  or
certificate  furnished by or on behalf of Borrower or any Restricted  Subsidiary
in  connection  with the Loan  Documents  contains  any  untrue  statement  of a
material  fact or omits any  material  fact  required  to be stated  therein  or
necessary to make the  statements  made therein,  in light of the  circumstances
under which they are made, not misleading as of the time when made or delivered.

                  5.21     Accounts and Inventory.

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<PAGE>

                           (a) (i) The Eligible  Accounts are and will  continue
to be bona fide existing obligations created by the sale of goods, the rendering
of services, or the furnishing of other good and sufficient consideration to the
relevant  Account  Debtors in the regular course of business;  (ii) all shipping
and delivery receipts and other documents furnished or to be furnished to Lender
in connection  therewith are and will be genuine; and (iii) none of the Accounts
identified  or  included  on any  schedule,  certificate  or report as  Eligible
Accounts  will,  to  Borrower's  knowledge,  fail at the time so  identified  or
included to satisfy any of the  requirements  for  eligibility  set forth in the
definition of Eligible Accounts.

                           (b) As to each  schedule of  Inventory  delivered  to
Lender, to Borrower's knowledge:

                                    (i)   the  descriptions,   origins,   sizes,
qualities,  quantities, weights, and markings of all goods stated thereon, or on
any attachment thereto, are true and correct in all material respects; and

                                    (ii)  none of the goods  are  defective,  of
second quality,  used, or goods returned after shipment,  except where described
as such.

                  5.22     Leases.

                           (a) Each  of  the  supplements  to  the  master lease
between  Wal-Mart and Borrower  with respect to retail  locations of Borrower or
any of its  Subsidiaries  located in a Wal-Mart retail store is substantially in
the form of Exhibit C;

                           (b) Each of the leases between  Wal-Mart and Borrower
with respect to retail locations of Borrower or any of its Subsidiaries  located
in a Sam's Club retail store is substantially in the form of Exhibit D; and

                           (c) Each of the leases  between Fred Meyer,  Inc. and
Borrower is substantially in the form of Exhibit E.

                  5.23   Compliance   With  Laws.   Each  of  Borrower  and  its
Subsidiaries  has  timely  filed  all  material  reports,  documents  and  other
materials  required to be filed by it under all applicable  Requirements  of Law
with any Governmental Authority, has retained all material records and documents
required to be retained by it under all applicable  Requirements  of Law, and is
otherwise in material  compliance  with all  applicable  Requirements  of Law in
respect of the conduct of its business and the  ownership  and  operation of its
properties.

                                       55
<PAGE>

                  5.24  Year  2000  Compatibility.  Any  reprogramming  by or on
behalf of  Borrower  or any of its  Subsidiaries,  required to permit the proper
functioning,  before,  on and after  January  1,  2000,  of  Borrower's  and its
Subsidiaries' (i) computer-based  systems and (ii) equipment containing embedded
microchips  (including  systems and  equipment  supplied by others or with which
Borrower's or any of its Subsidiaries'  systems  interface),  and the testing of
all such  systems  and  equipment,  as so  reprogrammed,  will be  completed  by
November  30,  1999.  The  cost  to  Borrower  and  its   Subsidiaries  of  such
reprogramming and testing and of the reasonably foreseeable  consequences of the
year 2000 to  Borrower  and its  Subsidiaries  (including,  without  limitation,
reprogramming  errors and the failure of others'  systems or equipment) will not
result  in a  Default  or  Material  Adverse  Effect.  Except  for  such  of the
reprogramming  referred to in the preceding  sentence as may be  necessary,  the
computer and management information systems of Borrower and its Subsidiaries are
and, with ordinary course  upgrading and maintenance  will continue for the term
of this Agreement to be,  sufficient to permit Borrower and its  Subsidiaries to
conduct their respective businesses without a Material Adverse Effect.

                  5.25  Material  Contracts.  Schedule  5.25  lists,  as of  the
Amendment  Closing Date,  each "material  contract"  (within the meaning of Item
601(b)(10) of Regulation S-K under the Exchange Act) to which Borrower or any of
its Subsidiaries is a party, by which any of them or their respective properties
is  bound  or  to  which  any  of  them  is  subject  (collectively,   "Material
Contracts").  As of the Amendment Closing Date, (i) each Material Contract is in
full force and effect and is enforceable in all material respects by Borrower or
the Subsidiary of Borrower that is a party thereto in accordance with its terms,
and (ii) neither Borrower nor any of its Subsidiaries  (nor, to the knowledge of
Borrower, any other party thereto) is in breach of or default under any Material
Contract  in any  material  respect  or  has  given  notice  of  termination  or
cancellation  of any  Material  Contract.  Schedule  5.25 also lists,  as of the
Amendment Closing Date, all of the Credit Card Agreements then in effect.

         6.       AFFIRMATIVE COVENANTS.

                  Borrower  covenants  and  agrees  that,  so long as any credit
hereunder   shall  be  available  and  until  full  and  final  payment  of  the
Obligations,  and unless  Lender shall  otherwise  consent in writing,  Borrower
shall do all of the following:

                  6.1   Financial Statements.  Borrower shall deliver to Lender:

                  (a) as soon as available,  but not later than ninety (90) days
after  the end of each  fiscal  year,  a copy of the  audited  consolidated  and
unaudited consolidating balance sheet of Borrower and its Subsidiaries as at the
end  of  such  year  and  the  related   audited   consolidated   and  unaudited
consolidating statements of income or operations,  shareholders' equity and cash
flows for such year,  setting forth in each case in comparative form the figures
for the previous fiscal year, and accompanied by the opinion of a

                                       56
<PAGE>

nationally-recognized independent public accounting firm ("Independent Auditor")
which  report shall state that such  consolidated  and  consolidating  financial
statements  present fairly the financial  position for the periods  indicated in
conformity with GAAP applied on a basis consistent with prior fiscal years. Such
opinion  shall not be  qualified or limited  because of a restricted  or limited
examination by the Independent  Auditor of any material portion of Borrower's or
any Subsidiary's records and shall be delivered to Lender;

                  (b) as soon as available,  but not later than  forty-five (45)
days after the end of each of the first three (3) fiscal quarters of each fiscal
year (commencing with the fiscal quarter ended closest to September 30, 1999), a
copy of the unaudited  consolidated and consolidating  balance sheet of Borrower
and  its  Subsidiaries   (and  separate  balance  sheet  for  each  Unrestricted
Subsidiary),   as  of  the  end  of  such  quarter  and  the  related  unaudited
consolidated and consolidating  statements of income,  shareholders'  equity and
cash flows for the period commencing on the first day and ending on the last day
of such quarter, and certified by a Responsible Officer as fairly presenting, in
accordance   with  GAAP  (subject  to  ordinary,   good  faith   year-end  audit
adjustments),  the  financial  position and the results of operations of each of
Borrower and its  Subsidiaries  (and separate  statements for each  Unrestricted
Subsidiary);

                  (c) as soon as available,  but not later than thirty (30) days
after the end of each month  (commencing with the month ended October 31, 1999),
a copy  of the  unaudited  consolidated  and  consolidating  balance  sheets  of
Borrower  and its  Subsidiaries  and the  related  consolidating  statements  of
income,  shareholders'  equity and cash flows for such month and a statement  of
EBITDA  for the  twelve  (12)  month  period  then  ended,  all  certified  by a
Responsible  Officer as fairly  presenting,  in accordance with GAAP (subject to
ordinary, good faith year-end audit adjustments), the financial position and the
results of operations of each of Borrower and its Subsidiaries.

                  6.2   Certificates; Other Information.  Borrower shall furnish
to Lender:

                           (a)      The  following  documents  at the  following
times in form  satisfactory  to Lender:  (i) on each Business Day, a flash sales
report, collection journal, and credit register, (ii) on a monthly basis and, in
any event,  by no later than the  thirtieth  (30th) day of each month during the
term of this  Agreement,  (x) a detailed  calculation of the Borrowing Base, and
(y) a detailed aging,  by total, of the Accounts,  (iii) on a monthly basis and,
in any event, by no later than the thirtieth (30th) day of each month during the
term of this Agreement,  a summary aging, by vendor, of the accounts payable and
any book overdraft of Borrower and its Restricted Subsidiaries, (iv) on a weekly
basis,  Inventory  reports  specifying  Borrower's or the applicable  Restricted
Subsidiary's  cost of its Inventory by category,  with additional detail showing
additions to and deletions from the  Inventory,  (v) to the extent not delivered
under clause (i) above, on each Business Day, notice of all returns, disputes,

                                       57
<PAGE>

or  claims,  (vi)  upon  request,  copies of  invoices  in  connection  with the
Accounts,  customer  statements,  credit memos,  remittance advices and reports,
deposit slips,  shipping and delivery  documents in connection with the Accounts
and  for  Inventory  and  Equipment  acquired  by  Borrower  or  any  Restricted
Subsidiary,  purchase orders and invoices,  (vii) a monthly basis, a calculation
of the Dilution for the prior month; (viii) promptly upon the opening of any new
location  of Borrower  or any  Restricted  Subsidiary,  a report  detailing  the
address of such new location and whether Borrower or such Restricted  Subsidiary
has delivered to Lender (A) a Uniform  Commercial Code financing  statement with
respect  to the  jurisdiction  in which  such  location  is  situated  and (B) a
Collateral  Access Agreement with respect to such location;  and (ix) such other
reports, including, without limitation, electronic data, as to the Collateral as
Lender may request from time to time;

                           (b)      concurrently   with   the  delivery  of  the
financial  statements  referred  to in  Section  6.1(a),  a  certificate  of the
Independent Auditor stating that in making the examination necessary therefor no
knowledge  was obtained of any Default or Event of Default  under  Section 7.14,
except as specified in such certificate;

                           (c)      concurrently  with  the  delivery   of   the
financial  statements  referred  to in Section  6.1(a)  and  Section  6.1(b),  a
Compliance Certificate executed by a Responsible Officer;

                           (d)      concurrently  with  the   delivery   of  the
financial  statements referred to in Section 6.1(b), a certificate executed by a
Responsible  Officer  setting  forth  dividends  and  other  distributions  from
Unrestricted  Subsidiaries  to Borrower  or any  Restricted  Subsidiary  for the
immediately preceding fiscal quarter;

                           (e)      (i) a  monthly  budget for each  fiscal year
on or before the date  thirty  (30) days after the first day of such fiscal year
and (ii) a projected monthly budget forecast,  in form and substance  acceptable
to Lender,  for each upcoming fiscal year on or before the date thirty (30) days
prior to the first day of such upcoming fiscal year;

                           (f) promptly,  copies of all financial statements and
reports that  Borrower  sends to its  shareholders,  and copies of all financial
statements and regular,  periodical or special reports (including Forms 10K, 10Q
and 8K) that Borrower or any Subsidiary may make to, or file with, the SEC;

                           (g) promptly upon receipt,  a copy of any "management
letter"  received  by it that has  been  prepared  by its  internal  or  outside
accountants;

                           (h) promptly,  such additional  information regarding
the business,  financial or corporate  affairs of Borrower or any  Subsidiary as
Lender may from time to time reasonably request; and

                                       58
<PAGE>

                           (i) at least fifteen (15) days  prior to the  closing
of any  retail  store  location,  notice of the  closing  of such  retail  store
location,  together  with an estimate of  reasonably  anticipated  cash  closing
expenses for such closing and a calculation  of the total cash closing  expenses
for all retail store closings from the Amendment Closing Date.

                  6.3      Notices.  Borrower shall promptly notify Lender:

                           (a)      of the occurrence of any Default or Event of
Default;

                           (b)      of (i)  any  breach or  non-performance  of,
or any  default  under,  any  Contractual  Obligation  of Borrower or any of its
Subsidiaries  which could reasonably be expected to result in a Material Adverse
Effect;  and  (ii)  any  dispute,  litigation,   investigation,   proceeding  or
suspension  which  may  exist  at  any  time  between  Borrower  or  any  of its
Subsidiaries and any  Governmental  Authority which could reasonably be expected
to result in a Material Adverse Effect;

                           (c)      of  the  commencement  of, or  any  material
development  in, any litigation or proceeding  affecting  Borrower or any of its
Subsidiaries  (i) in which the amount of damages  claimed  is  $250,000  (or its
equivalent in another  currency or currencies) or more, (ii) in which injunctive
or similar relief is sought and which, if adversely determined, would reasonably
be  expected  to have a Material  Adverse  Effect,  or (iii) in which the relief
sought is an injunction or other stay of the  performance  of this  Agreement or
any Loan Document;

                           (d)      upon, but in no event  later  than  ten (10)
days after, becoming aware of (i) any and all enforcement,  cleanup,  removal or
other  governmental or regulatory  actions  instituted,  completed or threatened
against  Borrower  or any  of  its  Subsidiaries  or  any  of  their  respective
properties  pursuant  to any  applicable  Environmental  Laws,  (ii)  all  other
Environmental  Claims,  and (iii) any  environmental or similar condition on any
real property adjoining or in the vicinity of the property of Borrower or any of
its Subsidiaries  that could reasonably be anticipated to cause such property or
any part thereof to be subject to any restrictions on the ownership,  occupancy,
transferability or use of such property under any Environmental  Laws, and which
in the case of any  event  described  in  clause  (i),  (ii) or (iii)  above has
resulted or could  reasonably be expected to result in liability of Borrower and
its Subsidiaries in excess of $250,000 in the aggregate;

                           (e)      of  any  other  litigation   or   proceeding
affecting  Borrower or any of its Subsidiaries  which Borrower would be required
to report to the SEC  pursuant to the Exchange  Act,  within four (4) days after
reporting the same to the SEC;


                                       59
<PAGE>

                           (f)      of  the occurrence  of  any of the following
events  affecting  Borrower or any ERISA  Affiliate  which has resulted or could
reasonably  be expected to result in liability of Borrower and its  Subsidiaries
in excess of $250,000 in the aggregate  (but in no event more than ten (10) days
after such  event),  and deliver to Lender a copy of any notice with  respect to
such event that is filed with a Governmental  Authority and any notice delivered
by a Governmental  Authority to Borrower or any ERISA  Affiliate with respect to
such event:

                                    (i)  an ERISA Event;

                                    (ii) a  material  increase  in the  Unfunded
     Pension Liability of any Pension Plan;

                                    (iii) the adoption  of, or the  commencement
     of contributions to, any Plan subject to Section 412 of the IRC by Borrower
     or any ERISA Affiliate; or

                                    (iv) the  adoption  of any  amendment  to  a
     Plan  subject to Section  412 of the IRC,  if such  amendment  results in a
     material increase in contributions or Unfunded Pension Liability.

                           (g)      of   any   material   change  in  accounting
policies or financial reporting practices by Borrower or any of its consolidated
Subsidiaries; and

                           (h)      at  least  thirty  (30) days prior  thereto,
that Borrower or any of its  Subsidiaries  intends to change its name or address
from that  disclosed to Lender as of the Amendment  Closing Date,  together with
disclosures of such new name or address.

                           Each notice under this Section  shall be  accompanied
by a written  statement by a  Responsible  Officer  setting forth details of the
occurrence referred to therein, and stating what action Borrower or any affected
Subsidiary of Borrower  proposes to take with respect  thereto and at what time.
Each notice under Section 6.3(a) shall describe with  particularity  any and all
clauses or  provisions  of this  Agreement or other Loan Document that have been
(or foreseeably will be) breached or violated.

                  6.4      Preservation  of  Corporate Existence, Etc.  Borrower
shall, and shall cause each Subsidiary to:

                           (a)      preserve  and  maintain  in  full  force and
effect its corporate  existence and good standing under the laws of its state or
jurisdiction of incorporation.

                           (b)      preserve   and   maintain   in   full  force
and  effect  all  governmental  rights,  privileges,  qualifications,   permits,
licenses and  franchises  necessary  or  desirable in the normal  conduct of its
business  except in connection  with  transactions  permitted by Section 7.3 and
sales of assets permitted by Section 7.2;

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                           (c)      use  reasonable  efforts,  in  the  ordinary
course of business, to preserve its business organization and goodwill; and

                           (d)      preserve   or  renew  all of  its   material
registered patents, trademarks, trade names and service marks.

Nothing in this Section 6.4 shall prohibit the liquidation or dissolution of any
Subsidiary  into  Borrower  or  another  Subsidiary  of  Borrower  (but  if  the
liquidating  or  dissolving  Subsidiary  is a  Restricted  Subsidiary,  it  must
liquidate or dissolve into Borrower or another Restricted Subsidiary).

                  6.5  Maintenance  of Property.  Borrower shall  maintain,  and
shall cause each of its Subsidiaries to maintain,  and preserve all its property
which is used or useful in its  business in good  working  order and  condition,
ordinary wear and tear  excepted,  except as permitted by Section 7.2.  Borrower
and each  Subsidiary  shall use the  standard of care typical in the industry in
the operation and maintenance of its facilities; provided, however, that nothing
in this  Section  6.5 shall  prevent  Borrower or any of its  Subsidiaries  from
discontinuing  the use,  operation or maintenance of any of its  properties,  or
disposing of any of them, if such discontinuance or disposal is, in the judgment
of the  Board of  Directors  of  Borrower  or of the Board of  Directors  of the
Subsidiary  concerned,  or of an officer (or other agent employed by Borrower or
any of its  Subsidiaries)  of  Borrower  or such  Subsidiary  having  managerial
responsibility  for such  property,  desirable in the conduct of the business of
Borrower or such Subsidiary; provided further, however, that any disposal of any
property  pursuant to the immediately  preceding proviso shall be subject to the
terms and conditions of Article 7 of this Agreement.

                  6.6      Insurance.

                           (a)      At  Borrower's  expense,  Borrower  and  its
Subsidiaries  shall keep the Collateral  insured against loss or damage by fire,
theft,  explosion,  sprinklers,  and all other  hazards  and risks,  and in such
amounts,   as  are  ordinarily  insured  against  by  other  owners  in  similar
businesses.   Borrower  and  its  Subsidiaries   also  shall  maintain  business
interruption, public liability, product liability, and property damage insurance
relating to their  ownership  and use of the  Collateral,  as well as  insurance
against larceny, embezzlement, and criminal misappropriation. All such insurance
shall contain an  endorsement  showing  Lender as an additional  insured or loss
payee, as applicable.

                           (b)      All such  policies of insurance  shall be in
such  form,  with  such  companies,  and in such  amounts  as may be  reasonably
satisfactory  to  Lender.  All  insurance  required  herein  shall be written by
companies  which  are  authorized  to do  insurance  business  in the  State  of
California.  All hazard  insurance  and such  other  insurance  as Lender  shall
specify, shall contain a California Form 438BFU (NS) mortgagee  endorsement,  or
an equivalent endorsement satisfactory to Lender, showing Lender as sole loss

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payee  thereof,  and  shall  contain  a waiver of  warranties.  Every  policy of
insurance  referred to in this  Section 6.6 shall  contain an  agreement  by the
insurer that it will not cancel such policy  except after thirty (30) days prior
written notice to Lender and that any loss payable  thereunder  shall be payable
notwithstanding  any act or negligence of Borrower,  any of its  Subsidiaries or
Lender which might,  absent such  agreement,  result in a forfeiture of all or a
part of such  insurance  payment.  Borrower  shall  deliver to Lender  certified
copies of such policies of insurance and evidence of the payment of all premiums
therefor within ninety (90) days of the Amendment Closing Date.

                           (c)      Original  policies or  certificates  thereof
satisfactory to Lender evidencing such insurance shall be delivered to Lender at
least  thirty (30) days prior to the  expiration  of the  existing or  preceding
policies.  Borrower  shall give  Lender  prompt  notice of any loss in excess of
$250,000  covered by such  insurance,  and Lender shall have the right to adjust
any loss.  Lender shall have the  exclusive  right to adjust all losses  payable
under any such  insurance  policies  without any liability to Borrower or any of
its Subsidiaries whatsoever in respect of such adjustments.  Any monies received
as  payment  for any loss in  excess of  $250,000  under  any  insurance  policy
including the insurance  policies  mentioned above, shall be paid over to Lender
to be  applied  at  the  option  of  Lender  either  to  the  prepayment  of the
Obligations  without  premium,  in such order or manner as Lender may elect,  or
shall be disbursed to Borrower or any of its  Subsidiaries  under stage  payment
terms   satisfactory   to  Lender  for  application  to  the  cost  of  repairs,
replacements,  or restorations;  provided,  however, that all insurance proceeds
received by Borrower  after the  occurrence  and during the  continuation  of an
Event of  Default  shall be  promptly  paid over to Lender to be  applied to the
Obligations  as  determined  by  Lender  in its sole  discretion.  All  repairs,
replacements,  or restorations shall be effected with reasonable  promptness and
shall be of a value  at  least  equal  to the  value  of the  items or  property
destroyed prior to such damage or  destruction.  Upon the occurrence of an Event
of Default,  Lender  shall have the right to apply all  prepaid  premiums to the
payment of the Obligations in such order or form as Lender shall determine.

                           (d)      Neither Borrower nor any of its Subsidiaries
shall take out separate  insurance  concurrent  in form or  contributing  in the
event of loss with that required to be maintained under this Section 6.6, unless
Lender is  included  thereon as named  insured  with the loss  payable to Lender
under a standard  California  438BFU (NS)  Mortgagee  endorsement,  or its local
equivalent.  Borrower  immediately  shall notify  Lender  whenever such separate
insurance is taken out,  specifying the insurer  thereunder and full particulars
as to  the  policies  evidencing  the  same,  and  originals  of  such  policies
immediately shall be provided to Lender.

                  6.7 Payment of Obligations.  Borrower  shall,  and shall cause
each of its  Subsidiaries to, pay and discharge as the same shall become due and
payable, all of the following obligations and liabilities:


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<PAGE>

                           (a)      all  tax   liabilities,    assessments   and
governmental  charges or levies upon it or its properties or assets,  unless the
same are the subject of a Permitted Protest; and

                           (b)      all lawful claims which, if unpaid, would by
law  become a Lien  upon its  property,  unless  the same are the  subject  of a
Permitted Protest; and

                           (c)      after  the   Amendment  Closing   Date,  all
interest payments due in respect of the Senior Notes.

                  6.8 Compliance  with Laws.  Borrower  shall comply,  and shall
cause each of its  Subsidiaries  to comply,  in all material  respects  with all
Requirements of Law of any Governmental Authority having jurisdiction over it or
its business  (including the Federal Fair Labor Standards  Act),  except such as
may be contested in good faith or as to which a bona fide dispute may exist.

                  6.9 Compliance  with ERISA.  Borrower  shall,  and shall cause
each of its ERISA  Affiliates  to: (a) maintain  each Plan in  compliance in all
material  respects with the  applicable  provisions of ERISA,  the IRC and other
federal or state  law;  (b) cause each Plan  which is  qualified  under  Section
401(a) of the IRC to  maintain  such  qualification;  and (c) make all  required
contributions  to any Plan  subject  to  Section  412 of the IRC,  except  where
Borrower  failure to comply with the requirements of (a), (b) and (c) hereof has
not  resulted or could not  reasonably  be expected  to result in  liability  of
Borrower and its Subsidiaries in excess of $250,000 in the aggregate.

                  6.10  Inspection  of Property and Books and Records.  Borrower
shall maintain,  and shall cause each of its  Subsidiaries  to maintain,  proper
books of  record  and  account,  in which  full,  true and  correct  entries  in
conformity  with  GAAP  consistently  applied  shall  be made  of all  financial
transactions and matters  involving the assets and business of Borrower and such
Subsidiary  (which shall include,  without  limitation,  accurate records of all
intercompany  transfers  among  Borrower and its  Subsidiaries).  Borrower shall
permit, and shall cause each of its Subsidiaries to permit,  representatives and
independent  contractors of Lender to visit and inspect any of their  respective
Books and Records, properties, to examine their respective corporate,  financial
and operating records,  and make copies thereof or abstracts  therefrom,  and to
discuss their  respective  affairs,  finances and accounts with their respective
directors,  officers, and independent public accountants, and to check, test and
appraise  the  Collateral  (including,  but not limited to,  appraisals  for the
purpose  of  determining  the GOB  Rate)  in order to  verify  their  respective
financial condition or the amount,  quality,  value,  condition of, or any other
matter relating to, the  Collateral,  all at the expense of Borrower and at such
reasonable  times during normal business hours and as often as may be reasonably
desired, upon reasonable advance notice to Borrower;  provided, however, when an
Event of Default  exists  Lender may do any of the  foregoing  at the expense of
Borrower at any time during normal business hours and without advance notice

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                  6.11     Environmental Laws.

                           (a)      Borrower shall,  and shall cause each of its
Subsidiaries  to,  conduct its  operations and keep and maintain its property in
compliance in all material respects with all Environmental Laws.

                           (b)      Upon   the   written   request  of   Lender,
Borrower shall submit and cause each of its  Subsidiaries to submit,  to Lender,
at Borrower's sole cost and expense, at reasonable intervals, a report providing
an  update  of the  status of any  environmental,  health or safety  compliance,
hazard or liability issue  identified in any notice or report required  pursuant
to Section  6.3(d),  that could,  individually  or in the  aggregate,  result in
liability in excess of $250,000.

                  6.12 Use of Proceeds.  Borrower  shall use the proceeds of the
Loans to refinance Indebtedness outstanding under the Prior Credit Agreement, to
finance capital expenditures and for working capital and other general corporate
purposes  including (i) to make interest  payments when due on the Senior Notes,
and (ii) to make investments in and loans to Restricted  Subsidiaries so long as
such investments and loans are accurately  accounted for in Borrower's Books and
Records.

                  6.13     Further Assurances.

                           (a)      Borrower  shall  ensure   that  all  written
information,  exhibits  and  reports  furnished  to  Lender  do not and will not
contain any untrue  statement of a material fact and do not and will not omit to
state any material fact or any fact necessary to make the  statements  contained
therein not  misleading in light of the  circumstances  in which made,  and will
promptly  disclose  to  Lender  and  correct  any  defect  or error  that may be
discovered  therein or in any Loan Document or in the execution,  acknowledgment
or recordation thereof.

                           (b)      Promptly  upon  request by Lender,  Borrower
shall (and shall cause any of its  Subsidiaries  to) do,  execute,  acknowledge,
deliver, record, re-record, file, re-file, register and re-register, any and all
such  further  acts,  deeds,   conveyances,   security  agreements,   mortgages,
assignments,  estoppel  certificates,  financing  statements  and  continuations
thereof, termination statements, notices of assignment, transfers, certificates,
assurances and other instruments Lender may reasonably require from time to time
in order (i) to carry out more effectively the purposes of this Agreement or any
other  Loan  Document,  (ii)  to  subject  to the  Liens  created  by any of the
Collateral  Documents any of the properties,  rights or interests covered by any
of the  Collateral  Documents,  (iii) to  perfect  and  maintain  the  validity,
effectiveness  and  priority of any of the  Collateral  Documents  and the Liens
intended  to be  created  thereby,  and (iv) to better  assure,  convey,  grant,
assign, transfer,  preserve, protect and confirm to Lender the rights granted or
now or  hereafter  intended to be granted to Lender  under any Loan  Document or
under any other document executed in connection therewith.

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<PAGE>

                           (c)      Original  sales  invoices  evidencing  daily
sales  shall  be  mailed  by  Borrower  and  its  Restricted  Subsidiaries,   as
applicable,  to each  Account  Debtor  (other  than  retail  customers)  and, at
Lender's  direction after the occurrence and during the continuation of an Event
of Default,  the invoices shall indicate on their face that the Account has been
assigned to Lender and that all payments are to be made directly to Lender.

                  6.14 Bank  Accounts.  Borrower shall not, and shall not permit
any Restricted Subsidiary to, open or maintain any deposit or investment account
with any bank or other financial  institution other than the accounts  described
on Schedule 6.14 as supplemented on a quarterly basis by notice of Lender.

                  6.15 Year 2000  Compatibility.  Borrower  will, and will cause
each of its  Subsidiaries  to,  take all  action  necessary  to ensure  that its
computer-based  systems  are  able  to  operate  and  effectively  process  data
including dates on and after January 1, 2000,  except where the failure to do so
could not reasonably be expected to result in a Material Adverse Effect.  At the
request of Lender,  Borrower  will provide  reasonable  assurance of its and its
Subsidiaries' year 2000 compatibility.

                  6.16 Covenants  Regarding  Formation of  Subsidiaries.  At any
time of (a)  the  formation  of any new  Subsidiary  by  Borrower  or any of its
Subsidiaries whether pursuant to a permitted Acquisition or otherwise or (b) any
Unrestricted  Subsidiary becoming a Restricted  Subsidiary  hereunder,  Borrower
will, and will cause any such Restricted  Subsidiaries  (a) to provide to Lender
supplements  to  the  Subsidiary  Guaranty  and  Subsidiary  Security  Agreement
executed by such new  Restricted  Subsidiary,  together with  appropriate  UCC-1
financing  statements  and  appropriate  attachments,  all in form and substance
satisfactory to Lender, and (b) to provide to Lender, a duly executed supplement
to the Pledge  Agreement or the Subsidiary  Pledge  Agreement,  as  appropriate,
together  with such  other  documentation  as is, in the  reasonable  opinion of
Lender,  appropriate  to  give  effect  to the  pledge  of the  shares  of  such
Restricted Subsidiary, in form and substance satisfactory to Lender. In addition
to the  foregoing,  Borrower  shall  provide to Lender such  opinions  and other
documentation  as  shall be  reasonably  requested  by  Lender.  Each  document,
agreement or instrument  executed or issued  pursuant to this Section 6.16 shall
be a "Collateral Document" for purposes of this Credit Agreement.

                  6.17 Tax Returns.  Borrower  shall deliver to Lender copies of
each of Borrower's and its Subsidiaries'  future federal income tax returns, and
any amendments  thereto,  within thirty (30) days of the filing thereof with the
IRS.

                  6.18 Returns. Cause returns and allowances, if any, as between
Borrower and its Restricted Subsidiaries and their respective Account Debtors to
be on the same basis and in  accordance  with the usual  customary  practices of
Borrower  and its  Restricted  Subsidiaries,  as they  exist  at the time of the
execution and delivery of this Agreement. If, at a time when no Event of Default

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<PAGE>

has occurred and is  continuing,  any Account  Debtor  returns any  Inventory to
Borrower or any Restricted Subsidiary,  such Person promptly shall determine the
reason for such return and, if such Person  accepts such return,  issue a credit
memorandum in the appropriate  amount to such Account Debtor. If, at a time when
an Event of Default has occurred and is  continuing,  any Account  Debtor (other
than a retail  customer)  returns any  Inventory  to Borrower or any  Restricted
Subsidiary,  such Person  promptly  shall  determine the reason for such return,
issue a credit  memorandum (with a copy to be sent to Lender) in the appropriate
amount to such Account Debtor.

                  6.19  Title to  Equipment.  Upon  Lender's  request,  Borrower
immediately shall deliver to Lender, properly endorsed, any and all certificates
of title or applications  for certificates of title to any items of Equipment of
Borrower and its Restricted Subsidiaries.

         7.       NEGATIVE COVENANTS.

                  Borrower  covenants  and  agrees  that,  so long as any credit
hereunder   shall  be  available  and  until  full  and  final  payment  of  the
Obligations,  Borrower will not do any of the following  without  Lender's prior
written consent:

                  7.1  Limitation  on Liens.  Borrower  shall not, and shall not
suffer or permit any of its  Subsidiaries  to,  directly  or  indirectly,  make,
create,  incur,  assume or suffer to exist any Lien upon or with  respect to any
part of its property,  whether now owned or hereafter  acquired,  other than the
following ("Permitted Liens"):

                           (a)      any   Lien   (other   than   a  Lien  on the
Collateral)  existing on property of Borrower or any of its  Subsidiaries on the
Amendment  Closing  Date and set forth in  Schedule  7.1  securing  Indebtedness
outstanding  on such date or any extension,  renewal or  refinancing  thereof so
long as the Indebtedness  secured by such Lien is not increased and the terms of
such extension,  renewal or refinancing are not more onerous on Borrower and its
Subsidiaries than the Indebtedness so extended, renewed or refinanced;

                           (b)      any Lien created under any Loan Document;

                           (c)      Liens   for   taxes,  fees,  assessments  or
other  governmental  charges which are not delinquent or remain payable  without
penalty,  or to the extent that non-payment thereof is permitted by Section 6.7,
provided that no notice of lien has been filed or recorded under the IRC;

                           (d)      carriers',    warehousemen's,    mechanics',
landlords',  materialmen's,  repairmen's  or other  similar Liens arising in the
ordinary  course of business which are not delinquent or remain payable  without
penalty  or  which  are  being  contested  in  good  faith  and  by  appropriate
proceedings,  which  proceedings have the effect of preventing the forfeiture or
sale of the property subject thereto;

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                           (e)      Liens  (other  than  any  Lien   imposed  by
ERISA and other  than on the  Collateral)  consisting  of  pledges  or  deposits
required  in the  ordinary  course  of  business  in  connection  with  workers'
compensation, unemployment insurance and other social security legislation;

                           (f)      Liens  on the  property of  Borrower  or any
of its Subsidiaries  securing (i) the non-delinquent  performance of bids, trade
contracts (other than for borrowed money), leases,  statutory obligations,  (ii)
contingent   obligations   on  surety  and  appeal   bonds,   and  (iii)   other
non-delinquent  obligations  of a like  nature;  in each case,  incurred  in the
ordinary course of business,  provided all such Liens in the aggregate would not
(even if enforced) cause a Material Adverse Effect;

                           (g)      Liens  consisting of  judgment  or  judicial
attachment liens that do not constitute Events of Default under Section 8.1(i);

                           (h)      easements,    rights-of-way,    restrictions
and other  similar  encumbrances  incurred  in the  ordinary  course of business
which, in the aggregate,  are not substantial in amount, and which do not in any
case  materially  detract  from the value of the  property  subject  thereto  or
interfere  with the  ordinary  conduct of the  businesses  of  Borrower  and its
Subsidiaries;

                           (i)      Liens  on   assets  of   corporations  which
become Subsidiaries after the date of this Agreement;  provided,  however,  that
such Liens existed at the time the respective  corporations  became Subsidiaries
and were not  created in  anticipation  thereof,  and the  Indebtedness  secured
thereby shall be permitted under Section 7.5(f);

                           (j)      purchase  money  security  interests  on any
property acquired or held by Borrower or its Subsidiaries  securing Indebtedness
incurred or assumed for the purpose of financing  all or any part of the cost of
acquiring  such  property;  provided  that (i) any such  Lien  attaches  to such
property  concurrently with or within forty-five (45) days after the acquisition
thereof,  (ii) such Lien  attaches  solely to the  property  so acquired in such
transaction,  (iii) the  principal  amount of the debt secured  thereby does not
exceed one hundred  percent  (100%) of the cost of such  property,  and (iv) the
Purchase Money Indebtedness  secured by any and all such purchase money security
interests shall be permitted under Section 7.5(f);

                           (k)      Liens securing Capitalized Lease Obligations
on assets subject to such leases, provided that the Indebtedness secured thereby
shall be permitted under Section 7.5(f);

                           (l)      Liens  arising   solely  by  virtue  of  any
statutory or common law provision relating to banker's liens,  rights of set-off
or similar rights and remedies as to deposit  accounts or other funds maintained
with a creditor depository institution; provided that (i) such deposit account

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is not a dedicated cash  collateral  account and is not subject to  restrictions
against  access  by  Borrower  in  excess  of those  set  forth  by  regulations
promulgated by the Board of Governors of the Federal  Reserve  System,  and (ii)
such deposit  account is not intended by Borrower or any of its  Subsidiaries to
provide collateral to the depository institution;

                           (m)      Liens   on   any  Managed   Care  Subsidiary
pursuant to the applicable  rules and regulations  of, or undertakings  made to,
any regulatory  entity having  jurisdiction and authority over such Managed Care
Subsidiary; and

                           (n)      Liens on intercompany Indebtedness permitted
under Section 7.5(c) hereof.

                  7.2  Disposition of Assets.  Borrower shall not, and shall not
suffer or permit any Subsidiary to, directly or indirectly, sell, assign, lease,
convey,  transfer  or  otherwise  dispose  of  (whether  in one or a  series  of
transactions) any property  (including  accounts and notes  receivable,  with or
without  recourse)  or enter  into  any  agreement  to do any of the  foregoing,
except:

                  (a)  dispositions  of (i) Inventory in the ordinary  course of
business,  or (ii) used, worn-out or surplus Equipment in the ordinary course of
business in an amount not to exceed $250,000 in the aggregate during the term of
this Agreement;

                  (b)  the  sales  of  equipment,  in an  amount  not to  exceed
$250,000 in the aggregate during the term of this Agreement,  to the extent that
such  Equipment is exchanged  for credit  against the purchase  price of similar
replacement  Equipment,  or the  proceeds of such sale are  reasonably  promptly
applied to the purchase price of such replacement Equipment;  provided, that (i)
Lender shall have a first priority perfected Lien on such replacement  Equipment
and (ii) any cash  proceeds  remaining  after the  purchase of such  Replacement
Equipment shall be applied as a repayment of the Obligations;

                  (c)  Disposition not otherwise  permitted  hereunder which are
made for fair market value;  provided,  that (i) at the time of any disposition,
no Event of Default shall exist or shall result from such Disposition,  (ii) the
aggregate sales price from such disposition shall be paid in Qualified Proceeds,
(iii)  (x) the  aggregate  value  of all  assets  so sold  by  Borrower  and its
Subsidiaries, together, shall not exceed $100,000, or (y) such Disposition shall
constitute a  Disposition  of a retail store  location  permitted  under Section
7.18(b),  and  (iv)  the  cash  portion  of Net  Proceeds  relating  to any such
Disposition  promptly  shall be used to make a  prepayment  of the Loans and the
non-cash portion of any such Net Proceeds promptly shall be pledged to Lender to
secure the  Obligations  pursuant  to  documentation  reasonably  acceptable  to
Lender; and


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                  (d)  subleases of real  property and Equipment in the ordinary
course of business to independent eye care professionals.

                  7.3 Consolidations and Mergers.  Borrower shall not, and shall
not  suffer  or  permit  any  of  its   Subsidiaries   to,  merge,   reorganize,
recapitalize,   reclassify   its  capital  stock  or  other  equity   interests,
consolidate  with or into, or convey,  transfer,  lease or otherwise  dispose of
(whether in one transaction or in a series of transactions  all or substantially
all of its assets  (whether now owned or  hereafter  acquired) to or in favor of
any Person, form any new subsidiary,  or liquidate,  wind up, or dissolve itself
(or suffer any liquidation or dissolution), except:

                           (a)      any   Subsidiary  may merge  with  Borrower,
provided that Borrower shall be the continuing or surviving corporation, or with
any one or more Restricted Subsidiaries,  provided that if any transaction shall
be  between  an  Unrestricted  Subsidiary  and  a  Restricted  Subsidiary,   the
Restricted Subsidiary shall be the continuing or surviving corporation,  and any
Unrestricted Subsidiary may merge with another Unrestricted Subsidiary; and

                           (b)      any  Subsidiary  may sell  or  transfer  all
or substantially all of its assets (upon voluntary liquidation or otherwise), to
Borrower or a Restricted Subsidiary, and any Unrestricted Subsidiary may sell or
transfer all or substantially  all of its assets (upon voluntary  liquidation or
otherwise) to another Unrestricted Subsidiary.

                  7.4 Loans and  Investments.  Borrower  shall not  purchase  or
acquire,  or suffer or permit any Subsidiary to purchase or acquire, or make any
commitment therefor,  any capital stock, equity interest,  or any obligations or
other  securities of, or any interest in, any Person,  or make or commit to make
any  Acquisitions,  or make or commit to make any  advance,  loan,  extension of
credit  or  capital  contribution  to or any other  investment  in,  any  Person
including any Affiliate of Borrower (together, "Investments"), except for:

                           (a)      Investments  held   by   Borrower   or   any
Subsidiary in the form of cash equivalents;

                           (b)      extensions  of  credi   in   the  nature  of
accounts  receivable  arising from the sale or lease of goods or services in the
ordinary course of business;

                           (c)      Investments  by   Borrower  in  any  of  its
Restricted  Subsidiaries or by any of its Restricted  Subsidiaries in another of
its Restricted Subsidiaries;

                           (d)      so long as Borrower has Excess Availability,
on the date of such  Investment  and after giving  effect  thereto,  of at least
$1,500,000,  Investments made or after the Amendment Closing Date by Borrower or
any Restricted  Subsidiary in existing  Unrestricted  Subsidiaries not to exceed
$750,000 in the aggregate; and

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                           (e)      Loans  to   employees  of  Borrower  or  its
Subsidiaries not to exceed $200,000 at any time outstanding.

                  7.5 Limitation on Indebtedness.  Borrower shall not, and shall
not suffer or permit any Subsidiary to, create,  incur, assume, suffer to exist,
or otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:

                           (a)      Indebtedness   incurred   pursuant  to  this
Agreement;

                           (b)      Indebtedness    consisting   of   Contingent
Obligations permitted pursuant to Section 7.8;

                           (c)      Intercompany Indebtedness issued to Borrower
by its Restricted  Subsidiaries  and, to the extent permitted by Section 7.4(e),
intercompany  Indebtedness  issued  to  Borrower  by  Unrestricted  Subsidiaries
provided  that  any  and  all of  such  Indebtedness  shall  be  evidenced  by a
promissory  note or notes  which  shall be  assigned  and  delivered  to  Lender
pursuant to the Security Agreement;

                           (d)      Indebtedness  existing   on   the  Amendment
Closing Date and set forth in Schedule 7.5;

                           (e)      prior    to   March   1,   2000,   unsecured
Indebtedness of Borrower  pursuant to its interest rate swap  arrangements  with
Wachovia Bank,  N.A., in an aggregate  notional amount not to exceed  $5,000,000
(the "Wachovia Swap Obligations");

                           (f)      Indebtedness  in  an  aggregate  amount  not
to exceed $1,000,000 at any time secured by Liens otherwise permitted by Section
7.1(i), (j) and (k);

                           (g)      Indebtedness  outstanding  under  the Senior
Notes; and

                           (h)      Any  extension,  renewal  or  refinancing of
any of the foregoing Indebtedness so long as the principal amount thereof is not
increased  as a result  thereof  and the terms  thereof  are no more  adverse to
Borrower  and its  Subsidiaries  or Lender than the  Indebtedness  so  extended,
renewed or refinanced.

                  7.6  Transactions  with  Affiliates.  Borrower  shall not, and
shall not suffer or permit any  Subsidiary to, enter into any  transaction  with
any  Affiliate  of  Borrower,  except  upon  fair and  reasonable  terms no less
favorable  to  Borrower or such  Subsidiary  than would  obtain in a  comparable
arm's-length  transaction  with a Person not an  Affiliate  of  Borrower or such
Subsidiary.

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                  7.7 Use of Proceeds.  Borrower shall not, and shall not suffer
or permit any Subsidiary to, use any portion of the proceeds of the Loans or any
Letter of Credit, directly or indirectly, (i) to purchase or carry Margin Stock,
(ii) to repay or otherwise refinance Indebtedness of Borrower or others incurred
to purchase or carry  Margin  Stock,  (iii) to extend  credit for the purpose of
purchasing or carrying any Margin Stock,  or (iv) to acquire any security in any
transaction  that is subject to Section 13 or 14 of the Exchange Act,  except in
compliance with such Sections.

                  7.8 Contingent Obligations.  Borrower shall not, and shall not
suffer or permit any Subsidiary to, create, incur, assume or suffer to exist any
Contingent Obligations except:

                           (a)      endorsements  for  collection  or deposit in
the ordinary course of business;

                           (b)      prior  to  March 1, 2000, the  Wachovia Swap
Obligations;

                           (c)      Contingent  Obligations of Borrower and  its
Subsidiaries  existing as of the  Amendment  Closing Date and listed in Schedule
7.8;

                           (d)  Contingent  Obligations  with  respect to Surety
Instruments  incurred to provide  security  for  workers'  compensation  claims,
payment obligations in connection with  self-insurance or similar  requirements,
in  each  case  incurred  in  the  ordinary  course  of  business  and  securing
obligations not constituting Indebtedness;

                           (e)  Contingent  Obligations  with  respect to Surety
Instruments incurred in respect of trade letters of
credit,  standby  letters of credit or  performance,  surety or appeal bonds, in
each case incurred in the ordinary  course of business and securing  obligations
not  constituting  Indebtedness  and not  exceeding at any time  $250,000 in the
aggregate in respect of Borrower and its Subsidiaries together; and

                           (f)      Contingent Obligations with  respect  to any
liability of Borrower or any Restricted  Subsidiary which is otherwise permitted
under this Agreement.

                  7.9 Joint  Ventures.  Borrower shall not, and shall not suffer
or permit any Subsidiary to enter into any Joint  Venture,  except that Borrower
and its  Subsidiaries  may enter into alliances with other  retailers or managed
care companies to solicit and perform  managed care contracts  which  agreements
must be reasonably acceptable to Lender.


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<PAGE>

                  7.10  Restricted  Payments.  Borrower shall not, and shall not
suffer or permit any  Subsidiary  to,  declare or make any  dividend  payment or
other  distribution  of  assets,   properties,   cash,  rights,  obligations  or
securities  on  account  of any  shares of any class of its  capital  stock,  or
purchase,  redeem or otherwise acquire for value any shares of its capital stock
or any  warrants,  rights or options to acquire  such  shares,  now or hereafter
outstanding  (all  such  dividends,  distributions,  purchases,  redemptions  or
acquisitions  are herein  referred  to as  "Restricted  Payments"),  except that
Borrower and any Restricted Subsidiary may:

                           (a)      declare  and make dividend payments or other
distributions payable solely in its common stock;

                           (b)      make  repurchases  of  the  common  stock of
Borrower  from  employees  of  Borrower  or  any of its  Subsidiaries  or  their
authorized   representatives  or  successors  upon  the  death,   disability  or
termination of employment of such employees in an aggregate amount not to exceed
$100,000 in any  calendar  year as long as no Default or Event of Default  shall
have occurred and be continuing or result therefrom; and

                           (c)      make  repurchases  of  the  common  stock of
Borrower  pursuant to the terms of the Put Option  Agreement,  dated  October 1,
1997, by and between  Borrower and Myrel Neumann,  O.D., as such agreement is in
effect in all material  respects on the  Amendment  Closing  Date, as long as no
Default or Event of Default  shall have  occurred  and be  continuing  or result
therefrom,  in an aggregate amount not to exceed $900,000 during the period from
January 1, 2000 until February 1, 2000.

                  7.11 ERISA. Borrower shall not, and shall not suffer or permit
any of its ERISA  Affiliates  to:  (a)  engage in a  prohibited  transaction  or
violation of the fiduciary  responsibility  rules with respect to any Plan which
has resulted or could reasonably  expected to result in liability of Borrower in
an aggregate  amount in excess of $250,000;  or (b) engage in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA which has resulted or could
reasonably be expected to result in liability by Borrower in an aggregate amount
in excess of $250,000.

                  7.12 Change in Business;  Change of Name.  Borrower shall not,
and shall not suffer or permit any Subsidiary to, engage in any material line of
business  which is not  reasonably  related or  complimentary  to those lines of
business  carried on by Borrower and its  Subsidiaries on the Amendment  Closing
Date.  Borrower  shall not,  and shall not suffer or permit any  Subsidiary  to,
change its corporate or other  organizational  structure  (within the meaning of
Section  11-9-402(7)  of the Code) without  Foothill's  prior  written  consent.
Borrower shall not, and shall not suffer or permit any Subsidiary to, change its
name, or identity,  or add any new  fictitious  name,  without thirty (30) days'
prior written notice to Lender.

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<PAGE>

                  7.13  Accounting  Changes.  Borrower  shall not, and shall not
suffer or permit any  Subsidiary to, make any  significant  change in accounting
treatment  or  reporting  practices,  except as required by GAAP,  or change the
fiscal year of Borrower or of any Subsidiary.

                  7.14  Financial Covenants. Borrower shall not fail to maintain
the financial covenants as set forth on Schedule 7.14.

                  7.15 Amendments.  Borrower shall not, and shall not permit any
Subsidiary  to,  permit  or  suffer  any  material  amendments,   modifications,
supplements,  or restatements of (a) its certificate of incorporation,  by-laws,
or other  governing  documents,  as applicable,  or (b) in any manner adverse to
Lender, the Senior Notes, the Indenture,  any leases referred to in Section 5.22
or any of its other Material  Contracts,  or any  Indebtedness  permitted  under
Section 7.5.

                  7.16 No Other  Negative  Pledges.  Borrower will not, and will
not permit or cause any of its  Subsidiaries  to, directly or indirectly,  enter
into or  suffer  to  exist  any  agreement  or  restriction  that  prohibits  or
conditions  the  creation,  incurrence  or  assumption  of any Lien upon or with
respect to any part of its  property or assets,  whether now owned or  hereafter
acquired,  or agree to do any of the  foregoing,  other than as set forth in (i)
this Agreement, the Collateral Documents or the Indenture, (ii) any agreement or
instrument  creating a Permitted  Lien (but only to the extent such agreement or
restriction  applies to the assets  subject to such Permitted  Lien),  and (iii)
operating leases of real or personal property entered into by Borrower or any of
its Subsidiaries as lessee in the ordinary course of business.

                  7.17  Prepayments.  Except in  connection  with a  refinancing
permitted by Section 7.5(f),  prepay,  redeem,  retire,  defease,  purchase,  or
otherwise  acquire any  Indebtedness  owing to any third Person,  other than the
Obligations in accordance with this Agreement.

                  7.18 Real Estate; Store Locations. Borrower will not, and will
not permit or cause any of its  Subsidiaries  to, (a) purchase any real property
or (b) close any of its retail store locations without the prior written consent
of Lender which shall not be unreasonably withheld.

                  7.19 Capital  Expenditures.  Borrower shall not, and shall not
permit any of its Subsidiaries to, make (a) capital  expenditures related to the
opening  of new  retail  store  locations  in an  aggregate  amount in excess of
$3,500,000  during any fiscal year, or (b) capital  expenditures in an aggregate
amount in excess of $10,000,000 during any fiscal year.

         8. EVENTS OF DEFAULT.  Any of the following shall  constitute an "Event
of Default":

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<PAGE>

                  8.1 Non-Payment. If Borrower fails to pay when due and payable
or when  declared due and payable,  any portion of the  Obligations  (whether of
principal, interest (including any interest which, but for the provisions of the
Bankruptcy  Code,  would have  accrued on such  amounts),  fees and  charges due
Lender,   reimbursement  of  Lender  Expenses,  or  other  amounts  constituting
Obligations); or

                  8.2 Representation or Warranty. Any representation or warranty
by Borrower or any of its Subsidiaries made or deemed made herein (other than in
Section  5.20),  in any  other  Loan  Document  or  which  is  contained  in any
certificate,  document or financial or other  statement by Borrower,  any of its
Subsidiaries  or any  Authorized  Person,  furnished  at  any  time  under  this
Agreement,  or in or under any other Loan Document, is incorrect in any material
respect on or as of the date made or deemed made; or

                  8.3 Specific  Defaults.  Borrower  fails to perform or observe
any term, covenant or agreement contained in any of Sections 6.1, 6.2, 6.3, 6.6,
6.9 or 6..12 or in Article 7; or

                  8.4 Other Defaults.  Borrower or any of its Subsidiaries party
thereto fails to perform or observe any other term or covenant contained in this
Agreement or any other Loan Document, and such default shall continue unremedied
for a period of five (5) Business  Days after the date upon which an  Authorized
Person knew or reasonably should have known of such failure; or

                  8.5 Cross-Default. (i) Borrower or any of its Subsidiaries (A)
fails  to  make  any  payment  in  respect  of any  Indebtedness  or  Contingent
Obligation, having an aggregate principal amount (including undrawn committed or
available  amounts  and  including  amounts  owing to all  creditors  under  any
combined  or  syndicated  credit  arrangement)  of more than  $250,000  when due
(whether by scheduled maturity,  required prepayment,  acceleration,  demand, or
otherwise);  or (B) fails to perform or observe any other condition or covenant,
or any other  event shall  occur or  condition  exist,  under any  agreement  or
instrument  relating to any such Indebtedness or Contingent  Obligation,  if the
effect of such failure,  event or condition is to cause, or to permit the holder
or  holders  of  such  Indebtedness  or  beneficiary  or  beneficiaries  of such
Indebtedness  (or a  trustee  or agent on behalf of such  holder or  holders  or
beneficiary or  beneficiaries)  to cause such  Indebtedness to be declared to be
due and payable prior to its stated maturity,  or such Contingent  Obligation to
become  payable or cash  collateral  in respect  thereof to be  demanded or (ii)
Borrower  or  any  of  its  Subsidiaries  (A)  shall  have  received  notice  of
termination  with respect to, or notice of an intent to terminate,  the Wal-Mart
Master Lease Agreement,  (B) shall be in default with respect to fifteen (15) or
more leases of real property  related to retail store locations  within Wal-Mart
stores to the extent the defaults  under such leases  would  permit  termination
thereof,  or (c) shall be in default  with respect to  twenty-five  (25) or more
leases of real property  related to retail store locations (other than locations
within Wal-Mart stores ) to the extent the defaults under such leases would

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<PAGE>

permit  termination  thereof;  provided,  however,  that the foregoing shall not
apply to the Existing  Defaults so long as such  Existing  Defaults are cured as
provided in Section 3.1(j) and Section 3.3(b); or

                  8.6 Insolvency; Voluntary Proceedings.  Borrower or any of its
Subsidiaries  (i) ceases or fails to be solvent,  or generally  fails to pay, or
admits in writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or otherwise;  (ii)
voluntarily  ceases to  conduct  its  business  in the  ordinary  course;  (iii)
commences any Insolvency  Proceeding  with respect to itself;  or (iv) takes any
action to effectuate or authorize any of the foregoing; or

                  8.7 Involuntary  Proceedings.  (i) Any involuntary  Insolvency
Proceeding is commenced or filed against Borrower or any of its Subsidiaries, or
any writ,  judgment,  warrant of attachment,  execution or similar  process,  is
issued  or  levied  against  a  substantial  part  of  Borrower's  or any of its
Subsidiaries'  properties,  and any such  proceeding  or  petition  shall not be
dismissed, or such writ, judgment,  warrant of attachment,  execution or similar
process  shall not be released,  vacated or fully bonded  within sixty (60) days
after  commencement,  filing or levy;  (ii) Borrower or any of its  Subsidiaries
admits  the  material  allegations  of a petition  against it in any  Insolvency
Proceeding,  or an order for relief (or  similar  order under  non-U.S.  law) is
ordered  in  any  Insolvency  Proceeding;  or  (iii)  Borrower  or  any  of  its
Subsidiaries  acquiesces in the appointment of a receiver,  trustee,  custodian,
conservator,  liquidator,  mortgagee in possession (or agent therefor), or other
similar Person for itself or a substantial  portion of its property or business;
or

                  8.8 ERISA.  (i) An ERISA Event  shall occur with  respect to a
Pension Plan or  Multiemployer  Plan which has resulted or could  reasonably  be
expected  to result in  liability  of  Borrower  under  Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of
$250,000;  or (ii) the aggregate amount of Unfunded Pension  Liability among all
Pension  Plans at any time  exceeds  $250,000;  or (iii)  Borrower  or any ERISA
Affiliate  shall fail to pay when due,  after the  expiration of any  applicable
grace period, any installment  payment with respect to its withdrawal  liability
under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in
excess of $250,000; or

                  8.9  Monetary   Judgments.   One  or  more   non-interlocutory
judgments,  non-interlocutory  orders,  decrees or arbitration awards is entered
against  Borrower  or any of  its  Subsidiaries  involving  in the  aggregate  a
liability (to the extent not covered by independent  third-party insurance as to
which the insurer does not dispute  coverage) as to any single or related series
of  transactions,  incidents or  conditions,  of $250,000 or more,  and the same
shall remain unsatisfied,  unvacated and unstayed pending appeal for a period of
twenty (20) days after the entry thereof; or

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                  8.10 Non-Monetary Judgments.  Any non-monetary judgment, order
or decree is entered against Borrower or any of its  Subsidiaries  which does or
would reasonably be expected to have a Material Adverse Effect,  and there shall
be any period of twenty (20) consecutive days during which a stay of enforcement
of such judgment or order, by reason of a pending appeal or otherwise, shall not
be in effect; or

                  8.11 Change of Control. There occurs any Change of Control; or

                  8.12 Loss of Licenses.  Any Governmental  Authority revokes or
fails to renew any material  license,  permit or franchise of Borrower or any of
its  Subsidiaries,  or Borrower or any of its  Subsidiaries for any reason loses
any material  license,  permit or franchise,  or Borrower or of its Subsidiaries
suffers the imposition of any restraining order,  escrow,  suspension or impound
of funds in connection  with any proceeding  (judicial or  administrative)  with
respect to any material license,  permit or franchise,  provided that such event
results in or could reasonably be expected to result in a loss of annual revenue
or  potential  revenue  of at least  the  lesser of (i)  $3,000,000  or (ii) one
percent (1%) of the gross revenues of Borrower (on a consolidated basis with its
Subsidiaries) for the most recently ended twelve (12) month period; or

                 8.13 Adverse Change. There occurs a Material Adverse Effect; or

                 8.14 Collateral.

                           (a) any material provision of any Collateral Document
         shall for any reason  cease to be valid and  binding on or  enforceable
         against Borrower or any of its  Subsidiaries  party thereto or Borrower
         or any of its Subsidiaries shall so state in writing or bring an action
         to limit its obligations or liabilities thereunder; or

                           (b) any  Collateral  Document  shall  for any  reason
         (other  than  pursuant  to the terms  thereof)  cease to create a valid
         security interest in the Collateral  purported to be covered thereby or
         such security interest shall for any reason cease to be a perfected and
         first priority security interest subject only to Permitted Liens; or

                  8.15 There shall occur a default or event of default under the
Senior Notes; or

                  8.16 James W. Krause  shall cease to be the chairman and chief
executive  officer of Borrower and shall not have been replaced by a new officer
reasonably acceptable to Lender within ninety (90) days; or

                  8.17  Borrower  or any of its  Subsidiaries  shall at any time
disavow  any of its  obligations  under,  or  shall  assert  the  invalidity  or
enforceability of, any of the Collateral Documents; or

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                  8.18  If  Borrower  or any of its  Subsidiaries  is  enjoined,
restrained,  or in any way  prevented by court order from  continuing to conduct
all or any material part of its business affairs; or

                  8.19 If Borrower or any of its Subsidiaries  makes any payment
on account of Indebtedness that has been contractually  subordinated in right of
payment to the payment of the Obligations,  except to the extent such payment is
permitted  by the  terms  of the  subordination  provisions  applicable  to such
Indebtedness.

                  8.20 (a) If a notice of Lien,  levy, or assessment is filed of
record with  respect to any of  Borrower's  or any  Subsidiary's  properties  or
assets in an amount in excess of $150,000 by the United  States  government,  or
any department,  agency, or instrumentality  thereof,  or by any state,  county,
municipal or governmental agency (except with respect to any taxes which are the
subject of a Permitted Protest),  or (b) if any taxes or debts owing at any time
hereafter  to any one or more of such  entities  becomes  a Lien in an amount in
excess of $150,000,  whether choate or otherwise,  upon any of Borrower's or any
Subsidiary's  properties  or assets and the same is not paid on the payment date
thereof  (except  with respect to any taxes which are the subject of a Permitted
Protest);  provided  that  Lender  shall have the right to  establish  a reserve
against the  Borrowing  Base in an amount of any such Lien  without  waiving its
rights and  remedies  with  respect to an Event of  Default  arising  under this
Section 8.20.

         9.       LENDER'S RIGHTS AND REMEDIES.

                  9.1 Rights and Remedies.  Upon the occurrence,  and during the
continuation,  of an Event of  Default,  Lender may,  at its  election,  without
notice of its election and without demand,  do any one or more of the following,
all of which are authorized by Borrower:

                           (a) Declare  all  Obligations,  whether evidenced  by
this Agreement,  by any of the other Loan Documents,  or otherwise,  immediately
due and payable;

                           (b) Cease advancing  money or extending  credit to or
for the  benefit  of  Borrower  under  this  Agreement,  under  any of the  Loan
Documents, or under any other agreement between Borrower and Lender;

                           (c) Terminate  this  Agreement  and  any of the other
Loan Documents as to any future  liability or obligation of Lender,  but without
affecting  Lender's rights and security  interests in the Collateral and without
affecting the Obligations;

                           (d) Settle or adjust  disputes  and  claims  directly
with  Account  Debtors  for  amounts  and  upon  terms  which  Lender  considers
advisable, and in such cases, Lender will credit Borrower's Loan Account with

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only the net  amounts  received by Lender in payment of such  disputed  Accounts
after  deducting  all  Lender  Expenses   incurred  or  expended  in  connection
therewith;

                           (e) Cause Borrower to hold all returned  Inventory in
trust for Lender,  segregate all returned  Inventory  from all other property of
Borrower or in  Borrower's  possession  and  conspicuously  label said  returned
Inventory as the property of Lender;

                           (f) Without  notice to or demand upon Borrower or any
guarantor,  make such payments and do such acts as Lender considers necessary or
reasonable to protect its security interests in the Collateral.  Borrower agrees
to assemble the  Collateral  if Lender so requires,  and to make the  Collateral
available  to Lender as Lender may  reasonably  designate.  Borrower  authorizes
Lender to enter  the  premises  where the  Collateral  is  located,  to take and
maintain possession of the Collateral,  or any part of it, and to pay, purchase,
contest,  or  compromise  any  encumbrance,  charge,  or Lien  that in  Lender's
determination  appears to conflict  with its security  interests  and to pay all
expenses  incurred in  connection  therewith.  With respect to any of Borrower's
owned or leased premises,  Borrower hereby grants Lender a license to enter into
possession of such premises and to occupy the same,  without  charge,  for up to
one hundred  twenty  (120) days in order to exercise  any of Lender's  rights or
remedies provided herein, at law, in equity, or otherwise;

                           (g) Without  notice to Borrower  (such  notice  being
expressly  waived),  and without  constituting  a retention of any collateral in
satisfaction  of an  obligation  (within the meaning of Section  11-9-505 of the
Code),  set off and  apply  to the  Obligations  any  and all (i)  balances  and
deposits  of Borrower  held by Lender  (including  any  amounts  received in the
Blocked  Accounts),  or (ii) indebtedness at any time owing to or for the credit
or the account of Borrower held by Lender;

                           (h) Hold, as cash  collateral,  any  and all balances
and deposits of Borrower held by Lender, and any amounts received in the Blocked
Accounts, to secure the full and final repayment of all of the Obligations;

                           (i) Seek the  appointment  of a receiver or keeper to
take  possession of the Collateral and to enforce any of Lender's  remedies with
respect to such appointment without prior notice or hearing, and Borrower hereby
consents  to such right and such  appointment  and hereby  waives any  objection
Borrower may have thereto or the right to have a bond or other  security  posted
by Lender in connection therewith;

                           (j) Ship, reclaim,  recover, store, finish, maintain,
repair,  prepare for sale,  advertise for sale, and sell (in the manner provided
for herein) the Collateral.  Lender is hereby granted a non-exclusive license or
other right to use,  without charge,  Borrower's  labels,  patents,  copyrights,
rights of use of any name, trade secrets, trade names, trademarks, service

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marks,  and  advertising  matter,  or any  property of a similar  nature,  as it
pertains to the Collateral,  in completing  production of, advertising for sale,
and selling any  Collateral  and  Borrower's  rights  under all licenses and all
franchise  agreements shall inure to Lender's  benefit(to the extent it does not
cause a violation or forfeiture thereof);

                           (k) Sell the Collateral at either a public or private
sale, or both, by way of one or more contracts or  transactions,  for cash or on
terms,  in such manner and at such places  (including  Borrower's  premises)  as
Lender  determines is  commercially  reasonable.  It is not  necessary  that the
Collateral be present at any such sale;

                           (l) Lender  shall give notice of the  disposition  of
the Collateral as follows:

                                    (1)     Lender shall give  Borrower and each
holder of a security  interest  in the  Collateral  who has filed with  Lender a
written request for notice,  a notice in writing of the time and place of public
sale, or, if the sale is a private sale or some other  disposition  other than a
public sale is to be made of the Collateral, then the time on or after which the
private sale or other disposition is to be made;

                                    (2)     The   notice  shall  be   personally
delivered or mailed,  postage prepaid, to Borrower as provided in Section 12, at
least five (5) days  before  the date  fixed for the sale,  or at least five (5)
days before the date on or after which the private sale or other  disposition is
to be made; no notice needs to be given prior to the  disposition of any portion
of the Collateral  that is perishable or threatens to decline  speedily in value
or that is of a type customarily sold on a recognized market.  Notice to Persons
other than Borrower claiming an interest in the Collateral shall be sent to such
addresses as they have furnished to Lender;

                                    (3)     If the sale is to be a public  sale,
Lender also shall give notice of the time and place by  publishing  a notice one
time at least  five  (5) days  before  the  date of the sale in a  newspaper  of
general circulation in the county in which the sale is to be held;

                           (m) Lender may credit bid and purchase at any  public
sale;

                           (n) Any deficiency  that exists after  disposition of
the  Collateral  as provided  above will be paid  immediately  by Borrower.  Any
excess will be  returned,  without  interest  and subject to the rights of third
Persons, by Lender to Borrower; and

                           (o) Borrower  acknowledges that the Obligations arose
out of a  commercial  transaction,  and agree that if an Event of Default  shall
occur,  Lender shall have the right to an immediate  writ of possession  without
notice of a hearing.

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                  9.2 Remedies  Cumulative.  Lender's  rights and remedies under
this  Agreement,   the  Loan  Documents,  and  all  other  agreements  shall  be
cumulative.  Lender shall have all other  rights and  remedies not  inconsistent
herewith as provided under the Code, by law, or in equity. No exercise by Lender
of one right or remedy shall be deemed an  election,  and no waiver by Lender of
any Event of Default  shall be deemed a  continuing  waiver.  No delay by Lender
shall constitute a waiver, election, or acquiescence by it.

         10.      TAXES AND EXPENSES.

                  If  Borrower   fails  to  pay  any  monies   (whether   taxes,
assessments, insurance premiums, or, in the case of leased properties or assets,
rents or other amounts payable under such leases) due to third Persons, or fails
to make any deposits or furnish any required proof of payment or deposit, all as
required  under the terms of this  Agreement,  then,  to the extent  that Lender
determines that such failure by Borrower could  reasonably be expected to have a
Material Adverse Effect, in its discretion and without prior notice to Borrower,
Lender may do any or all of the  following:  (a) make payment of the same or any
part  thereof;  (b) set up such  reserves in  Borrower's  Loan Account as Lender
deems necessary to protect Lender from the exposure created by such failure;  or
(c) obtain and maintain insurance policies of the type described in Section 6.6,
and take any action with respect to such policies as Lender deems  prudent.  Any
such amounts paid by Lender shall constitute Lender Expenses.  Any such payments
made by Lender  shall not  constitute  an  agreement  by Lender to make  similar
payments in the future or a waiver by Lender of any Event of Default  under this
Agreement.  Lender need not inquire as to, or contest the  validity of, any such
expense,  tax,  or Lien and the  receipt  of the usual  official  notice for the
payment  thereof shall be conclusive  evidence that the same was validly due and
owing.

         11.      WAIVERS; INDEMNIFICATION.

                  11.1 Demand;  Protest;  etc. Borrower waives demand,  protest,
notice of  protest,  notice of  default  or  dishonor,  notice  of  payment  and
nonpayment, nonpayment at maturity, release, compromise,  settlement, extension,
or renewal of accounts, documents, instruments, chattel paper, and guarantees at
any time held by Lender on which Borrower may in any way be liable.

                  11.2  Lender's  Liability  for  Collateral.  So long as Lender
complies  with its  obligations,  if any,  under  Section  11-9-207 of the Code,
Lender  shall not in any way or manner be  liable or  responsible  for:  (a) the
safekeeping  of the  Collateral;  (b) any loss or damage  thereto  occurring  or
arising in any manner or fashion from any cause; (c) any diminution in the value
thereof;  or (d)  any  act or  default  of any  carrier,  warehouseman,  bailee,
forwarding  agency, or other Person. All risk of loss, damage, or destruction of
the Collateral shall be borne by Borrower.

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                  11.3 Indemnification.  Borrower shall pay, indemnify,  defend,
and hold  Lender,  each  Participant,  and each of  their  respective  officers,
directors,   employees,   counsel,   agents,  and  attorneys-in-fact  (each,  an
"Indemnified Person") harmless (to the fullest extent permitted by law) from and
against  any  and  all  claims,   demands,   suits,   actions,   investigations,
proceedings,  and damages, and all reasonable  attorneys' fees and disbursements
and other costs and expenses actually  incurred in connection  therewith (as and
when they are incurred and irrespective of whether suit is brought), at any time
asserted against, imposed upon, or incurred by any of them in connection with or
as a result of or related to the execution, delivery, enforcement,  performance,
and  administration  of this  Agreement  and any  other  Loan  Documents  or the
transactions  contemplated  herein,  and  with  respect  to  any  investigation,
litigation, or proceeding related to this Agreement, any other Loan Document, or
the use of the  proceeds  of the  credit  provided  hereunder  (irrespective  of
whether any Indemnified Person is a party thereto), or any act, omission,  event
or circumstance in any manner related thereto (all the foregoing,  collectively,
the  "Indemnified  Liabilities").  Borrower  shall  have  no  obligation  to any
Indemnified  Person  under this  Section  11.3 with  respect to any  Indemnified
Liability  that a court of competent  jurisdiction  finally  determines  to have
resulted  from the gross  negligence or willful  misconduct of such  Indemnified
Person.  This provision  shall survive the termination of this Agreement and the
repayment of the Obligations.

         12.      NOTICES.

                  Unless  otherwise  provided in this Agreement,  all notices or
demands by any party relating to this Agreement or any other Loan Document shall
be in writing and  (except  for  financial  statements  and other  informational
documents  which may be sent by  first-class  mail,  postage  prepaid)  shall be
personally  delivered or sent by registered or certified mail (postage  prepaid,
return receipt  requested),  overnight  courier,  or facsimile to Borrower or to
Lender, as the case may be, at its address set forth below:

                  If to Borrower:   VISTA EYECARE, INC.
                                    296 Grayson Highway
                                    Lawrenceville, Georgia 30045-5737
                                    Attn: Chief Financial Officer
                                    Fax No. (770) 822-2027

                  with copies to:   VISTA EYECARE, INC.
                                    296 Grayson Highway
                                    Lawrenceville, Georgia 30045-5737
                                    Attn: General Counsel
                                    Fax No. (770) 822-2029

                  If to Lender:     FOOTHILL CAPITAL CORPORATION
                                    Northpark Town Center, Building 400
                                    1000 Abernathy Road, N.E., Suite 1450
                                    Atlanta, Georgia 30328
                                    Attn:  Business Finance Division Manager
                                    Fax No. (770) 508-1370

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<PAGE>

                  with copies to:   Paul, Hastings, Janofsky & Walker LLP
                                    600 Peachtree Street, N.E., Suite 2400
                                    Atlanta, Georgia 30308
                                    Attn: Chris D. Molen, Esq.
                                    Fax No. (404) 815-2424

                  The parties hereto may change the address at which they are to
receive notices hereunder, by notice in writing in the foregoing manner given to
the other. All notices or demands sent in accordance with this Section 12, other
than notices by Lender in connection  with Sections  11-9-504 or 11-9-505 of the
Code,  shall be deemed  received on the earlier of the date of actual receipt or
three  (3)  Business  Days  after the  deposit  thereof  in the  mail.  Borrower
acknowledges  and agrees that notices sent by Lender in connection with Sections
11-9-504 or 11-9-505 of the Code shall be deemed sent when deposited in the mail
or personally  delivered,  or, where permitted by law, transmitted  facsimile or
other similar method set forth above.

         13.      CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

                  THE VALIDITY OF THIS  AGREEMENT  AND THE OTHER LOAN  DOCUMENTS
(UNLESS  EXPRESSLY  PROVIDED TO THE  CONTRARY IN ANY OTHER LOAN  DOCUMENT),  THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS
OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING  HEREUNDER
OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED  UNDER,  GOVERNED
BY, AND  CONSTRUED  IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF  GEORGIA.  THE
PARTIES AGREE THAT ALL ACTIONS OR  PROCEEDINGS  ARISING IN CONNECTION  WITH THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS  SHALL BE TRIED AND LITIGATED ONLY IN THE
STATE AND FEDERAL COURTS  LOCATED IN THE COUNTY OF FULTON,  STATE OF GEORGIA OR,
AT THE SOLE OPTION OF LENDER,  IN ANY OTHER COURT IN WHICH LENDER SHALL INITIATE
LEGAL OR EQUITABLE  PROCEEDINGS AND WHICH HAS SUBJECT MATTER  JURISDICTION  OVER
THE MATTER IN  CONTROVERSY.  EACH OF BORROWER AND LENDER  WAIVES,  TO THE EXTENT
PERMITTED  UNDER  APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE
OF FORUM NON  CONVENIENS  OR TO OBJECT TO VENUE TO THE EXTENT ANY  PROCEEDING IS
BROUGHT IN ACCORDANCE WITH THIS SECTION 13. BORROWER AND LENDER HEREBY WAIVE, TO
THE EXTENT  PERMITTED UNDER  APPLICABLE LAW, THEIR  RESPECTIVE  RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION  BASED UPON OR  ARISING  OUT OF ANY OF THE
LOAN  DOCUMENTS  OR ANY  OF THE  TRANSACTIONS  CONTEMPLATED  THEREIN,  INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY  CLAIMS.  EACH OF BORROWER AND LENDER  REPRESENTS THAT IT HAS REVIEWED
THIS WAIVER AND EACH  KNOWINGLY  AND  VOLUNTARILY  WAIVES ITS JURY TRIAL  RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

         14.      DESTRUCTION OF BORROWER'S DOCUMENTS.

                  All documents,  schedules,  invoices,  agings, or other papers
delivered to Lender may be destroyed or otherwise disposed of by Lender four (4)
months after they are delivered to or received by Lender, unless Borrower

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requests, in writing, the return of said documents,  schedules,  or other papers
and makes arrangements, at Borrower's expense, for their return.

         15.      GENERAL PROVISIONS.

                  15.1 Effectiveness. This Agreement shall be binding and deemed
effective when executed by Borrower and Lender.

                  15.2  Successors and Assigns.  This  Agreement  shall bind and
inure to the  benefit of the  respective  successors  and assigns of each of the
parties;  provided,  however, that Borrower may not assign this Agreement or any
rights or duties  hereunder  without  Lender's  prior  written  consent  and any
prohibited  assignment  shall be absolutely void. No consent to an assignment by
Lender  shall  release  Borrower  from its  Obligations.  Lender may assign this
Agreement  and its rights and duties  hereunder  and no consent or  approval  by
Borrower is required in connection with any such assignment. Lender reserves the
right to sell, assign,  transfer,  negotiate,  or grant participations in all or
any part of, or any  interest  in Lender's  rights and  benefits  hereunder.  In
connection  with any such assignment or  participation,  Lender may disclose all
documents  and  information  which Lender now or hereafter  may have relating to
Borrower or Borrower's  business.  To the extent that Lender  assigns its rights
and  obligations  with  respect to the Loans and the  commitment  hereunder to a
third Person, Lender thereafter shall be released from such assigned obligations
to Borrower and such  assignment  shall effect a novation  between  Borrower and
such third  Person.  With  respect to any Person that  purchases  any portion of
Lender's  rights and obligations  under this Agreement  pursuant to the terms of
this Section  15.2,  such Person shall be entitled (i) to all of the benefits of
Section 11.3 hereof and (ii) to the payment of all Lender  Expenses and expenses
of the type  described in paragraph (c) of the Fee Letter as if such Person were
the "Lender" as defined herein and in the Fee Letter.

                  15.3  Section  Headings.  Headings  and numbers  have been set
forth  herein for  convenience  only.  Unless the  contrary is  compelled by the
context,  everything  contained in each section  applies  equally to this entire
Agreement.

                  15.4   Interpretation.   Neither   this   Agreement   nor  any
uncertainty or ambiguity herein shall be construed or resolved against Lender or
Borrower,  whether under any rule of construction or otherwise. On the contrary,
this  Agreement  has been  reviewed by all parties  and shall be  construed  and
interpreted  according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of all parties hereto.

                  15.5  Severability  of  Provisions.  Each  provision  of  this
Agreement  shall be severable  from every other  provision of this Agreement for
the purpose of determining the legal enforceability of any specific provision.

                  15.6  Amendments  in  Writing.  This  Agreement  can  only  be
amended by a writing signed by both Lender and Borrower.

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                  15.7 Counterparts;  Facsimile Execution. This Agreement may be
executed  in any number of  counterparts  and by  different  parties on separate
counterparts,  each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one and
the same  Agreement.  Delivery of an executed  counterpart  of this Agreement by
facsimile  shall be equally as  effective  as delivery  of an original  executed
counterpart of this Agreement.  Any party delivering an executed  counterpart of
this Agreement by facsimile also shall deliver an original executed  counterpart
of this  Agreement but the failure to deliver an original  executed  counterpart
shall not  affect  the  validity,  enforceability,  and  binding  effect of this
Agreement.

                  15.8  Revival  and   Reinstatement  of  Obligations.   If  the
incurrence  or payment of the  Obligations  by Borrower or any  guarantor of the
Obligations  or the  transfer by either or both of such parties to Lender of any
property of either or both of such parties should for any reason subsequently be
declared  to be void or  voidable  under any state or federal  law  relating  to
creditors'  rights,  including  provisions  of the  Bankruptcy  Code relating to
fraudulent conveyances,  preferences, and other voidable or recoverable payments
of money or transfers of property (collectively,  a "Voidable Transfer"), and if
Lender is required to repay or restore,  in whole or in part,  any such Voidable
Transfer, or elects to do so upon the reasonable advice of its counsel, then, as
to any such Voidable Transfer,  or the amount thereof that Lender is required or
elects  to repay or  restore,  and as to all  reasonable  costs,  expenses,  and
attorneys'  fees of Lender  related  thereto,  the liability of Borrower or such
guarantor  automatically  shall be revived,  reinstated,  and restored and shall
exist as though such Voidable Transfer had never been made.

                  15.9 Integration. This Agreement, together with the other Loan
Documents,  reflects the entire understanding of the parties with respect to the
transactions  contemplated  hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.

                  15.10 Time is of the  Essence.  Time is of the essence of this
Agreement.





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                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Agreement to be executed in Atlanta, Georgia.


                                            VISTA EYECARE, INC.,
                                            a Georgia corporation


                                            By      /s/  Mitchell Goodman
                                            Name:   Mitchell Goodman
                                            Title:  Executive Vice President


                                            FOOTHILL  CAPITAL   CORPORATION,   a
                                            California   corporation   with   an
                                            office  in  Atlanta,   Georgia,   as
                                            lender  and as agent for  itself and
                                            certain other Persons


                                            By       /s/ Patricia McLoughlin
                                            Name:    Patricia McLoughlin
                                            Title:   Vice President


                                            FOOTHILL  CAPITAL   CORPORATION,   a
                                            California   corporation   with   an
                                            office in Atlanta,  Georgia,  as the
                                            sole Bank,  the  Issuing  Bank,  the
                                            Documentation    Agent    and    the
                                            Administrative Agent under the Prior
                                            Credit Agreement

                                            By       /s/ Patricia McLoughlin
                                            Name:    Patricia McLoughlin
                                            Title:   Vice President


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                                TABLE OF CONTENTS



                                                                            Page

1.       DEFINITIONS AND CONSTRUCTION.........................................3
         1.1      Definitions.................................................3
         1.2      Accounting Terms...........................................25
         1.3      Code.......................................................25
         1.4      Construction...............................................25
         1.5      Schedules and Exhibits.....................................25

2.       LOAN AND TERMS OF PAYMENT...........................................25
         2.1      Revolving Advances.........................................25
         2.2      Letters of Credit..........................................27
         2.3      Term Loan..................................................29
         2.4      [Intentionally Omitted]....................................30
         2.5      Overadvances...............................................30
         2.6      Interest and Letter of Credit Fees:  Rates, Payments, and
                    Calculations; Promise to Pay.............................30
         2.7      Collection of Accounts.....................................32
         2.8      Crediting Payments; Application of Collections.............34
         2.9      Designated Account.........................................34
         2.10     Maintenance of Loan Account; Statements of Obligations.....35
         2.11     Fees.......................................................35
         2.12     Eurodollar Rate Advances...................................35
         2.13     Illegality.................................................37
         2.14     Requirements of Law........................................37
         2.15     Indemnity..................................................39

3.       CONDITIONS; TERM OF AGREEMENT.......................................39
         3.1      Conditions Precedent to the Initial Advance, Letter of
                    Credit and the Term Loans................................39
         3.2      Conditions Precedent to all Advances, all Letters of
                    Credit and the Term Loans................................41
         3.3      Condition Subsequent.......................................42
         3.4      Term.......................................................43
         3.5      Effect of Termination......................................43
         3.6      Early Termination by Borrower..............................43
         3.7      Termination Upon Event of Default..........................43

4.       [Intentionally Omitted].............................................44

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5.       REPRESENTATIONS AND WARRANTIES......................................44
         5.1      Corporate Existence and Power..............................44
         5.2      Corporate Authorization; No Contravention..................44
         5.3      Governmental Authorization. ...............................45
         5.4      Binding Effect.............................................45
         5.5      Litigation.................................................45
         5.6      No Default.................................................45
         5.7      ERISA Compliance...........................................46
         5.8      Use of Proceeds; Margin Regulations........................46
         5.9      Title to Properties........................................47
         5.10     Taxes......................................................47
         5.11     Financial Condition........................................47
         5.12     Environmental Matters......................................48
         5.13     Collateral Documents.......................................48
         5.14     Regulated Entities.........................................49
         5.15     No Burdensome Restrictions.................................49
         5.16     Copyrights, Patents, Trademarks and Licenses, Etc..........49
         5.17     Subsidiaries...............................................49
         5.18     Insurance..................................................50
         5.19     Solvency...................................................50
         5.20     Full Disclosure............................................50
         5.21     Accounts and Inventory.....................................50
         5.22     Leases.....................................................50
         5.23     Compliance With Laws.......................................51
         5.24     Year 2000 Compatibility....................................51
         5.25     Material Contracts.........................................51

6.       AFFIRMATIVE COVENANTS...............................................51
         6.1      Financial Statements.......................................52
         6.2      Certificates; Other Information............................52
         6.3      Notices....................................................54
         6.4      Preservation of Corporate Existence, Etc...................55
         6.5      Maintenance of Property....................................56
         6.6      Insurance..................................................56
         6.7      Payment of Obligations.....................................57
         6.8      Compliance with Laws.......................................58
         6.9      Compliance with ERISA......................................58
         6.10     Inspection of Property and Books and Records...............58
         6.11     Environmental Laws.........................................58
         6.12     Use of Proceeds............................................59
         6.13     Further Assurances.........................................59
         6.14     Bank Accounts..............................................59
         6.15     Year 2000 Compatibility....................................60
         6.16     Covenants Regarding Formation of Subsidiaries..............60
         6.17     Tax Returns................................................60
         6.18     Returns....................................................60
         6.19     Title to Equipment.........................................60

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7.       NEGATIVE COVENANTS..................................................60
         7.1      Limitation on Liens........................................61
         7.2      Disposition of Assets......................................62
         7.3      Consolidations and Mergers.................................63
         7.4      Loans and Investments......................................64
         7.5      Limitation on Indebtedness.................................64
         7.6      Transactions with Affiliates...............................65
         7.7      Use of Proceeds............................................65
         7.8      Contingent Obligations.....................................65
         7.9      Joint Ventures.............................................66
         7.10     Restricted Payments........................................66
         7.11     ERISA......................................................66
         7.12     Change in Business; Change of Name.........................67
         7.13     Accounting Changes.........................................67
         7.14     Financial Covenants........................................67
         7.15     Amendments.................................................67
         7.16     No Other Negative Pledges..................................67
         7.17     Prepayments................................................67
         7.18     Real Estate; Store Locations...............................67

8.       EVENTS OF DEFAULT...................................................68

9.       LENDER'S RIGHTS AND REMEDIES........................................71
         9.1      Rights and Remedies........................................71
         9.2      Remedies Cumulative........................................73

10.      TAXES AND EXPENSES..................................................73

11.      WAIVERS; INDEMNIFICATION............................................74
         11.1     Demand; Protest; etc.......................................74
         11.2     Lender's Liability for Collateral..........................74
         11.3     Indemnification............................................74

12.      NOTICES.............................................................75

13.      CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER..........................76

14.      DESTRUCTION OF BORROWER'S DOCUMENTS.................................76

15.      GENERAL PROVISIONS..................................................76
         15.1     Effectiveness..............................................76
         15.2     Successors and Assigns.....................................77
         15.3     Section Headings...........................................77
         15.4     Interpretation.............................................77
         15.5     Severability of Provisions.................................77
         15.6     Amendments in Writing......................................77
         15.7     Counterparts; Facsimile Execution..........................77
         15.8     Revival and Reinstatement of Obligations...................78
         15.9     Integration................................................78
         15.10    Time is of the Essence.....................................78

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